And Then There Was Silence...

With Jamie (Wall St. Warrior) and Trader-X both on vacation, it is very quiet. Below is what Jamie's trading facility looks like when he is gone. This supports the adage that simpler (trading) is better.


Monday and Tuesday of this week were fairly choppy and good trading setups were elusive. How do you know if a market session is "choppy"? Choppy sessions are characterized by congestion regions with lots of offsetting candles and/or doji like candles with upper and lower tails. Offsetting candles are pairs of candles whose bodies alternate color (green followed by red, or red followed by green). Also, most choppy days have a closing price that is near the opening price.

Look at the 15min QQQQ chart below and notice the congestion regions highlighted on Monday and Tuesday. Also notice where the market closed relative to where it opened. Although the market opened lower today (Wed gap down), there was steady buying pressure throughout the day (with some chop near the close). So, the market opened near the low of the day and closed near the high. These types of days are easier to trade and are where bigger money is made.


Here was my best trade on the long side today. The Fib lines are drawn per the classic gapper rules - from PDL to ORH. The steady buying pressure in the overall market allowed me to hold for the 62% extension of the large Fib range.