Lessons from the Pros


Simple is the Key to Trading

Today’s piece is about the power of simple, and simple starts and ends with a razor-sharp focus. One of the most important things you need to do to be successful when short term trading for income or long-term trading for wealth is to have proper focus. What I mean is this… As a day trader, all you need to do each day is look at a chart, apply the Supply/Demand strategy and focus on where institutions are buying and selling that day, and execute. The hard part is to focus only on that.

Below is a recent trade taken in the S&P during one of my live trading sessions. This is a bearish position at supply, the entry is in the circled area at supply. This opportunity started out by locating on the chart exactly where institutions were selling the S&P, the supply level you see in the upper left corner. I then entered the bearish position by selling short when price revisited supply and profited from a downside move. This is an example of executing OTA’s simple rule-based strategy; but the key is the focus and keeping things simple.

S&P Trade: 08/15/15

What makes this focus so hard for most people is all the other things they let into their decision making process. For example, prior to taking this trade, you may want to think about the economic numbers coming out that day. Wrong! We don’t consider that number or pay attention to it. All we care about when it comes to profitable trading is where the big buyers and sellers are in a market. You may want to see what’s happening in Turkey or with Oil or the next country nearing default. Let me tell you something… allocating one ounce of my focus on that is useless when it came to identifying where banks and financial institutions were selling S&P and then shorting in that area. The focus needs to be 100% on where the institutional sell orders are that day, week, or month and then selling there, nothing else. While other information may be interesting, it’s not going to help put money in my pocket.

Free Trading WorkshopThis is just my opinion of course, but from my experience nothing else matters when you know where institutions are buying and selling in a market and that’s the focus of Supply and Demand. If you don’t agree, that’s fine as well, this is what makes a market.

Hope this was helpful, have a great day.

Sam Seiden – sseiden@tradingacademy.com

DISCLAIMER This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results. Reprints allowed for private reading only, for all else, please obtain permission.

Join over 170,000 Lessons from the Pros readers. Get new articles delivered to your inbox weekly.