This year I have found my determination to make trading work for me. I’ve had an on/off relationship with trading for the last 10 years. At the start I was fortunate to have a colleague introduce me to the basics of trend trading forex with basic risk management. Unfortunately the idea of trading forex price action straight from candles never sat well with me. I couldn’t develop the confidence from that style of trading.
Since then I merely pottered around the trading industry. I built my web development business and became engrossed/distracted in that for a while. All good until I had my first baby and confirmed my disillusionment with the web industry (a post for another day). I moved back to a solo web development career and started looking at trading again.
Around September 2013 I stumbled across the Propex website, read their introductory PDF, and was referred to No BS Day Trading. I purchased the No BS basic material and was enlightened by what I read. It became clear that the information in the DOM was the level of detail that I needed to find confidence in a trade.
I ended up taking John’s Eurex webinar in early December to get a better feeling for how this “trading thing” works. I learned a lot from that experience and felt like I was on my way.
Since the start of 2013 I’ve been watching the DOM and charts religiously. Given my time zone and family commitments I’ve found the first two hours of Eurex open to work best for me. Organising myself and finding a routine has been a challenge but I think I’m there now. I’ve started to keep a diary and record each trading session. I’ve also begun a diary to dump my thoughts and determine my next actions. Staying consistent and developing a routine of continuous improvement has probably been the theme since the start of the year.
My focus has largely been scalping FGBL. I began to notice some patterns around previous day extremes in early February and this lead me to consider the same patterns around key levels. I wasn’t sure what those levels would be. From watching the DOM I had noticed that intra-day levels were constructed and produced similar patterns to what I had noticed at the previous day’s extremes. This lead me to auction theory.
I began to investigate auction theory and the application of that theory. I’m lucky enough to be in a chat room where some folks trade this style and it’s been good listening to their discussions. I’ve watched this movie from L2ST and there was some nice info about trading off auction theory and trading balanced vs imbalanced markets.
Then this morning I read this post about a prop trader’s enlightenment around scalping.
So this is my method: I just stare at the fucking screen and watch the bell curves forming on the side volume histogram. Once they are maturing, I fade the edges, and keep fading them. Then if some news comes, or i feel momentum is building in the movement( you can easily tell that if you are truly staring), i switch from fading to going with it, and I enter before hand itself and anticipate the breakout of the range. That’s it really.
It feels like we’re on the same road. My feeling for now is that you can definitely trade by price action alone, but it can be made more effective by finding price action validation with correlated markets and auction theory.