Back to notes
What indicates sell-side liquidity on a daily trading chart?
Press to flip
Sell-side liquidity is when the price moves below previous lows, leading to a likely retracement within the range.
When establishing a trading bias, what is the expected behavior of daily moves?
Each day should align with the established bias, though occasional up-close candles are acceptable even in a generally bearish bias.
Define 'equilibrium' in a trading context.
Equilibrium is the midpoint between the high and low, indicating a premium above it and a discount below it.
How can cross-checking with related markets assist in confirming trading setups?
Using related markets like S&P and Dow can confirm setups by looking for alignment or divergences with the primary market (e.g., NASDAQ).
What are fair value gaps and how do they apply to smaller timeframe trading?
Fair value gaps are price imbalances that can be targeted for trade entries or exits, especially useful in 2-minute to 15-minute chart setups.
How can long-term consistency be tracked in trading?
By analyzing position-based improvements over time, rather than focusing on quick profits or major wins.
Why can consolidation around equilibrium make bias determination difficult?
Consolidation around equilibrium can obscure market direction, necessitating more intel after market open to determine bias.
Describe the psychological adjustment necessary for maintaining consistency in trading.
Traders should manage expectations and focus on realistic, incremental goals rather than trying to achieve perfect trades.
What is the recommended risk management strategy for counter-trend trades?
For counter-trend trades, maintaining lower leverage is advised, ideally keeping risk below 1% for beginners.
Why is experience from real trading more valuable than theoretical knowledge?
Real trading experience offers practical insights and understanding of market setups, essential for learning and improvement.
How are lower timeframes useful during market consolidations?
Lower timeframes are crucial during consolidation as they help traders identify and trade intraday liquidity pools with precision.
How can traders deal with consolidation through smaller timeframes?
By observing liquidity pools in smaller timeframes and identifying key indicators like resistance and fair value gaps.
Explain the significance of time in trading algorithms.
Market algorithms often run on specific times, such as 8:30 AM New York time, affecting time and price analysis.
What should traders look for according to market structure analysis?
Traders should look for lower market structure shifts and trade into fair value gaps.
What is buy-side liquidity in the context of daily chart analysis?
Buy-side liquidity refers to price runs above relative equal highs, then dropping below a swing low.
Previous
Next