Friday 28 October 2016

Thinking like a Dealer Part 2

Image result for bull bear

intro


This is something my coach has been talking about particularly in relation to day trading.

The idea is to try and keep in mind that the dealer/broker only gets paid when orders are triggered.  As such they are constantly trying to push price into areas where the most amount of client orders sit.

plan


When planning our day trading strategy we need to approach the market as both a bull and a bear.

Where is a bull/bear most likely to have an order to start building a position? and where will they have their stop and take profit orders?

Once you have a general idea of where the major orders will be, try and place your orders where there's a convergence of bull and bear orders doing the same thing...

For example get short at an area where bears will be looking to build a short position and bulls are either taking profit or getting stopped out. It is at these points that  market players are in a form of "unity" and you increase your probability of success.