How to Trade Fast Moving Markets: This video (and article) will explain how to trade when the market moves fast, and show you one of my favorite techniques.
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How to trade fast moving markets is a very aggressive move, defined this way. (See video) We’re going to draw a rectangle here, so you can see how this works in both directions. In the mark and I like to show examples, both bullish and bearish. The concept is very simple. It’s like WD Gann used to talk about the confluence of time and price. You really need to understand price in relation to time.
How to Trade Fast Moving Markets
Here, (on video) we have a very steep angle from high to low. That’s a very aggressive, bearish move. That means people aren’t just taking profits from long positions, they’re going short, and they’re going short aggressively. There’s people coming in periodically, as you can see in this video.
The market has been floundering a little bit here, nothing too dramatic. In fact, we even get a triangle pattern and it comes back up, and there’s your first pretty strong impulse move. That’s just a little bit of a clue though, and then the market goes sideways. Ooh! That’s beautiful! That’s a beautiful short continuation pattern! Why? Because it means there’s not a lot of people coming in and buying, right? The point is here, shorting and very little buying.
When you are taking the position in this case, if you’re short, you don’t want a lot of buyers coming in. You don’t want Merrill Lynch, Goldman Sachs, and Citibank coming in and buying, when you’re short. What we have here is a little bit of profit taking. You’ve got more people coming in shorting and saying, “Here’s an opportunity. Looks like we broke below that low.” People are saying, “Okay, cool! So, I’ll come in and go short too”, because it’s still pretty early in the move.
Impulse Moves in a Fast Market
Here, we see another impulse move down. Is there any buying coming against this? No, in fact, this one is even a little better shorting signal than the previous one. You get some consolidation in the sense the narrow range bars, especially with regard to the open and closes. The slope isn’t that steep, but it’s still drifting on down. Just a little profit taking from people who shorted, and some people are going to take some profits.
Other people are coming in and they’re saying, “Wait a minute. This thing’s really taking off to the downside. Maybe I’ll join the party too!” They do, and get your next impulse move down. Okay, again a little bit of a sideways move, and one last impulse move down. This is the end of the party. This is where you definitely don’t want to go short anymore. Actually, I wouldn’t have even gone short here, and I’ll give you a little extra tip.
Nothing is a hundred percent in trading, but if we get short from up here, the typical pattern is where your odds are. Your odds are here, one, two, three, four or five. After five waves, I’m going to call them waves for the sake of argument right now. After five waves, that is the average pattern when you get these very aggressive, sharp angled moves. Now this one happens to go seven. That’s fine, the average wouldn’t be five, if we didn’t get three, and sometimes seven, right?
The Rule for Fast Moving Markets
One of the Top Dog Trading rules is: We never take the first cycle high after a dramatic angle down. Not just the angle, but measuring the relationship of time and price. It covers a lot of price, and a lot of range in a short amount of time. That’s the pattern, and everybody who wanted to go short already did. This play that people were watching is done. We don’t trade the exception, we trade the rule, where the probabilities are.
I’m showing you danger signals, when not to get in. This is a shortcoming in a lot of trading courses. They show you, trade this set up, trade that set up, and that’s all great, we all want to know that. What happens in real life, and I know this from my own experience, as well as working with thousands of students. People are looking for the real high probability setups, and they don’t occur as often as people would like. Then they get bored, and start looking for things that go beyond what they were taught. Beyond their methodology, and beyond their proven rules.
Then you start thinking you see stuff that you should trade, even if it’s not in your lessons, or course you took. We have this impulse that we want to take it. I’ve done it. I’m guilty. I’m raising my hand right now. Absolutely, and that’s how I knew this, because I’ve done it too many times myself. If you’re only shown what to do, then you’re left to your own devices when the markets doing a lot of nothing, or things that are low probability trades.
You should be taught the low probability trade setups as well. When you see them, and you know they’re low probability, you don’t get drawn in like a siren into the rocks. Over trading was my number one problem. That was my cardinal sin of trading, over trading. I had this problem all the time. So I had to learn, and did learn. Part of how I learned was taking certain trades that wouldn’t work out, over and over again.
Most people document what does work, but I documented what didn’t work. Then when I saw that, I’d be like, “Oh, it looks good! Wait a minute. No. I’ve seen this a hundred times before, and it rarely works out.” You need to know those to keep you out of danger. This is what will help prevent you from making a lot of money, and then giving it all back. Have you ever had that experience? You made a lot of money in the market for a while, and then ended up giving it all back? Well, this is one of the reasons that can happen, so it’s very important to learn setups that actually don’t work. Who teaches that? Well, I do, and I think you’d want to know, because this is what preserves your capital.
It’s good to share good things with good people. In addition to this, I do have a very specific trade strategy that I want to share with you all the details of my Rubberband Trade Strategy. It’s one of my favorite trade setups that I take all the time to this day. It still works, been working for, well, decades actually. And I’m happy to share with you all the rules, the entries, the exits, all the details of it. It’s about a 26 minute video that I will give you absolutely free. Just go ahead and click on the link in the top right-hand corner of this video or the link in the description below. As soon as you do that, I will email to you the Rubberband Trade Strategy.
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BTW, if you’re interested in the indicator that I use personally for very precise entries and exits, I’m happy to share that with you. Just send me an email at firstname.lastname@example.org, and I’ll show you how to get access to that indicator.
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