Day Trading – Know Your Market

Know The Market You’re Trading

Day traders are well-advised to know everything they can about the market they are trading. Traders who watch different markets on multiple screens make a big mistake (IMO), because in trading, as in every other business, it is essential to know the “adversary”. Markets are not all the same. Each has its own patterns and movements. I trade S&P Eminis and Micro Eminis. Over the 20+ years I’ve been trading, I’ve traded only these markets. (even before the micros). I have a familiarity with how this market moves – and yes, including how unpredictable is often is. Knowing my adversary and its characteristic movements allows me to better gauge the odds of a particular move happening, and whether or not to place a trade.

Every Market Is Different

No two markets are alike. Some trade in a narrow range, and some are volatile, making large prices swings. Day traders must know what to expect from the market they are trading, otherwise they are at a disadvantage of not knowing the market’s characteristic price movements. 

For example, many day traders trade emini futures. This is a market that tries to mask its movements, making it difficult for traders to determine its true direction until the last moment. Often, before the emini futures market makes a significant move one way in a short time, it will trade to the other direction in small incremental moves over a much longer time. Traders see prices moving one way, although not by much, and place a trade. Then, the market suddenly reverses and trades to the other direction, moving a much larger distance but in a very short time, perhaps only a minute. This is a common characteristic of the emini market and day traders who are familiar with this market have seen this many times and as a result, they don’t place a trade until the market shows its true hand.

Know Your Market

The more a trader knows about market she is trading gives her a big advantage over  traders who trade a variety of markets with which they are not intimitely familiar.

People who enroll in my trading course learn the characteristics of the emini futures market and so are better prepared to succeed as traders. You can gain this knowledge. by enrolling in my trading course using this link.

If you’re not ready to enroll, but want to join my mailing list and receive information about my trading course, subscribe using this form.