| Posted in PREPARING FOR THE MARKET DAY | Posted on
Successful swing traders start each market day with a thoughtful analysis of current conditions.
Identify larger cycles, external influences, and important news that will likely drive price action.
Then look at the most promising setups and decide whether they properly align with those complex
forces. Evaluate any special risk associated with trading that day and decide how to alter execution
strategy to adjust to the new environment. Should position size be increased or decreased? Should
the first hour be avoided or aggressively traded? Are conditions ripe for a major rally, selloff, or
reversal?
Review current sentiment, important numbers, and technical indicators. Define what types of
unexpected factors will tighten or relax current trade management tactics. Write down those
parameters to avoid getting fooled, if required. Then execute according to the predetermined
boundaries. Watch how the first hour action alters or adjusts this initial analysis. Then shift the
active strategy to accommodate real reversals, breakouts, or breakdowns as they exert their
influence. But beware of costly trend relativity errors. Make certain that important market shifts
occur within the time frame of interest before adjusting the trading plan to accommodate them.
Identify larger cycles, external influences, and important news that will likely drive price action.
Then look at the most promising setups and decide whether they properly align with those complex
forces. Evaluate any special risk associated with trading that day and decide how to alter execution
strategy to adjust to the new environment. Should position size be increased or decreased? Should
the first hour be avoided or aggressively traded? Are conditions ripe for a major rally, selloff, or
reversal?
Review current sentiment, important numbers, and technical indicators. Define what types of
unexpected factors will tighten or relax current trade management tactics. Write down those
parameters to avoid getting fooled, if required. Then execute according to the predetermined
boundaries. Watch how the first hour action alters or adjusts this initial analysis. Then shift the
active strategy to accommodate real reversals, breakouts, or breakdowns as they exert their
influence. But beware of costly trend relativity errors. Make certain that important market shifts
occur within the time frame of interest before adjusting the trading plan to accommodate them.
