Day Trading
Strategies
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Turtle
Trading
Invented
by a market guru called Richard Dennis, Turtle
Trading is a mechanical system that has, in the past,
been enormously profitable, and is thought by the general
public to be an almost infallible trading system. As a style,
it requires a particular mindset, as you will suffer a great
number of small losses, and only a few large wins. This can
be so disheartening that traders following this strategy either
give up, or cherry pick, missing the irregular huge winners
that offset the numerous small losers. Very deep pockets and
inordinate patience are required for this strategy to work
for you. It is definitely no use for day trading timescales.
Summary
Trading
of any kind (and that includes day trading) is simply another
business. A business with costs, profit margins, opportunities
and pitfalls. And like any other business, it requires training,
experience and effort to make money at it. The upside is that
by sticking to a sensible system like the Camarilla
{b} Equation, you will almost overnight achieve the equivalent
of years of day trading experience, will have to do
a lot less work, and will be exposed to far less danger than
would otherwise be the case.
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Day Trading
Market Makers
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Why
Markets behave as they do
Research
conducted by SureFireThing has highlighted some very interesting
facts about the mechanics of market movement. Building on
the concepts of 'Market Profile', and 'Reversion to the Mean
Theory', SureFireThing have created the Camarilla {b} Equation,
which, for the first time, describes market action with enough
accuracy to make day trading simple, and perhaps even enjoyable.
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Market
Profile
The original
creators of the Market Profile theory based their research
on the S+P 500 index, specifically on day trading future.
They devolved a number of very interesting conclusions, including
the idea of the 'Value Area'. This is a contiguous range of
prices that encapsulates about 70% of yesterday's price action.
They also came to the conclusion that market participants
fell into one of 2 timeframes, i.e. everyone trading was either
interested only in today (pit traders, day traders) or 'longer'
(swing traders, buy and hold traders etc). For some reason
the concept of the 'Value Area' won all the attention, and
a useful tool it is too.However, the real prize was the concept
of timeframes, and it is this phenomenon that the Camarilla
{b} Equation exploits with such ruthless efficiency.
Put simply,
the Camarilla {b} Equation identifies those points
where control passes from the day trader community to those
traders with longer timeframes (and hence stronger
holding powers). If you watch a market for any length of time,
you will notice that it generally 'rotates' up and down between
two levels. You do NOT want to be trading within these two
'floor trader' levels, no matter how tempting it looks, as
the rest of the day trading participants will likely have
faster reflexes than you, better luck, or the actual edge
in the pit, and will delight in taking your money off you,
as often as you care to step up to the ring. HOWEVER, if it
manages to break either of these levels, it generally then
zooms off as pent up demand explodes and cause rapid changes
in price. If you know where these levels are, and how deep
a penetration into them is significant, you are in a good
position to place a day trade that can become seriously profitable
in only a few minutes. And remember, the less time you
hold a position, the less risk you expose your money to.
The other
side of the Camarilla {b} Equation is the fact that market
movements are not infinite; they do exhaust themselves, and
they tend to die off according to a statistical theory reduced
to an equation by SureFireThing. Combining these 2 elements
gives the day trader the Camarilla {b} Equation, a veritable
'roadmap' to tomorrow's price action. This 'roadmap' includes
the information
- When
to stay out of the action
- When
to jump in
- Where
to put your stop loss
- Where
to take your profits
- The
likely range for the entire day
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