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Day Trading

The primary job of a market is to fill orders. Everything else that happens is derived from the reality of order filling. You enter a market with the purpose of having your order filled, and there are certain market participants who consider it their job to make a market — they do this by filling orders. Because day trading involves very short-term order filling, often many times per day, it is essential that you understand that over 90% of intraday market movement is nothing more than order filling. Order filling is why you see so many false breakouts in these markets.

Because intraday prices move primarily to fill orders, the market movement often makes no sense. Shortages, or perceived shortages, seasonality, or correlation have very little part in the action you see in during the time the markets are open.

Indicators always lag in the fast-moving price action. When you are day trading your focus has to be on the price action. What has happened previously is not going to help you very much with what is happening now.

You cannot predict what is going to happen. No one knows the future. No one knows where the very next tick will be. You have a one-in-three chance of being correct. Price could tick up, down, or in the same place. Therefore, you need to learn to trade the "now," not the past, and not the future, if you are going to engage in day trading.


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Thursday, 30 June 2022

Derivative transactions, including futures, are complex and carry a high degree of risk. They are intended for sophisticated investors and are not suitable for everyone. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results, and all of which can adversely affect actual trading results. For more information, see the Risk Disclosure Statement for Futures and Options.