Tuesday, December 2, 2008

Good Reading and Video

In my opinion, support and resistance with momentum are the way to trade. It involves the alignment of the trend on multiple time frames. You may have heard this before and it is difficult to put it to use. But it is like anything else, you need to practice. Practice makes you remember the rules. We have all heard that we should find something we are comfortable with and stick to it with discipline. If this is your style, all you need to do is pick the smallest time frame from which you want to trade. Use three time frames. I like to use the weekly, daily, and hourly to pick where I will enter.
The following video by Brian Shannon will help you understand this concept. If you want more reading, buy his book. He doesn't over complicate things, he makes it gumby pokey easy to understand. In case you don't know this because you've been living under a rock for 2 years, Shannon was the head of training at MarketWise for some time. They are a very good trading training firm in the US. Previously I have mention Sam Seidens work who also works for them. Shannon is a full time trader now. Buy his book. It is good for any type of trading, even forex. (If you use this link, I actually get paid a dollar or two).

In addition to this, if your interested in forex, read this PDF. It explains things pretty well at a high level. The "rules" and description of discipline and money management are honest, not a bullshit bunch of crap that is usually written.
One more thing before the video. Read this post to understand more about support and resistance. It explains the Gap & VWAP. The VWAP is the volume weighted average price.

The video below is timeless. I watched it three times to memorize the info. If you can memorize it, you will do better. Think of your job, and how you just "know" what to do day in and day out. You know it becuase you have done it so many times. Use a demo account, that will help memorize the info and required action. Again, watch the video a few times.

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