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And that my friend is what will determine if a trader is able to make money utilizing your setups. And an important consideration in my opinion.
Of course, the next question is - how do you determine the type of day we may have and how successful is that methodology in determining the type of day? |
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Yes¡¡¡ and thats probably the most exciting issue a trader has to get good on, and I admit screen time is the best teacher here...
In my case I call it "Momentum vs Non Momentum conditions" and so far in my experience Keltner Bands combined with a discretionary perception of market "velocity" (stuck vs flowing trades) can help determining this market climate...
About Keltners the outerbands are the frontiers between this two conditions... if the market can manage with a nice "velocity" to build price action outside the outerbands, we can consider this a momentum condition... if the market gets to this outerband frontier and velocity is stuck there having a hard time to get any further then cycle is present and we can expect cycle conditions in the market... refreshing back to the mid band...
So in my case I perceive momentum vs non momentum with keltner and velocity (some kind of tape reading)...
There are some great amount of nuances to this...
for example a news day, you may have a very slow market previous to the news, after the news (depending what news and numbers) market changes to momentum...
On some other ocations like yesterday previous to a holiday,market was on cylce mode... Momentum trading days sometime happens after small range days and on and on this goes... lots of aspects to determine this "market climate" perception... I think here is where any newbie has to make screen time and get good on it... after that having a nice simple strategy for each market condition and you are mostly in bussiness... cheers Walter.