Trading In The Zone

Strategies

Consistency is a function of a care-free objective state of mind where we are making ourselves available to perceive and act upon whatever the market is offering us from it’s perspective at any given now moment.

  • Carefree – meaning fearless
  • Objective – I trust myself to act in my self interest without any reservations, hesitations or internal conflicts under all circumstances
  • No potential to associate this now moment with anything in our rational mind as a memory
  • No potential to define or interpret market information in a threatening way

7 Principals Of Consistency

I am a consistently successful trader because

  1. I objectively identify my edges.
  2. I predefine the risk of every trade.
  3. I completely accept the risk or I am willing to let go of the trade.
  4. I act on my edges without reservation or hesitation.
  5. I pay myself as the market makes money available to me.
  6. I continually monitor my susceptibility for making errors.
  7. I understand the absolute necessity of these principles of consistent success and, therefore, I never violate them.”

Being Objective – Thinking In Probabilities (Fundamental Truths)

  1. Anything can happen.
  2. You don’t need to know what is going to happen next in order to make money.
  3. There is a random distribution between wins and losses for any given set of variables that define an edge.
  4. An edge is nothing more than an indication of a higher probability of one thing happening over another.
  5. Every moment in the market is unique.

Excerpt From: Mark Douglas. “Trading in the Zone: Master the Market with Confidence, Discipline, and a Winning Attitude.” Apple Books.

Trading Mechanically

  • The variables that define your edge are present or not
  • Trade in sample sizes (20-25 sample sizes)

1235510

Open Below 1M EMA above 5M EMA

Strategies

Usually there will be a defined premarket resistance level. The premarket level keeps dropping and eventually falls below the 1M EMA right before market open, where the stock will open.

  • There is a predefined premarket resistance level. May be an early entry point (2nd Bar).
  • If the overall news is bad it will keep dropping.
  • If no significant news, after the initial drop, it will comeback to the 9/15 EMAs.
  • Once the stock starts coming back up – the open/1M EMA or the pre-market resistance may serve as the resistance level

One reason for this scenario is that the stock has had a good run and is now flattening so people decide to sell – anticipating a decline.

Based on 24 December, 2019

Category: OPEN BELOW 1M EMA ABOVE 5M EMA

Open Above 1M 5M EMAs

Strategies

The premarket price movement will end up with the stock opening higher than the 1 EMA. With a solid 1st bar. If the news is good enough the stock will keep rising. Otherwise we may get a flag in the first few minutes to 9/15 EMAs.

  • Start early
  • Price will stay above 15EMA
  • Let it go until 10:00AM – 10:30AM or longer if able
  • Set stop-loss at purchase price once the price moves higher
  • Keep moving stop-loss up may be .50 cents (.50 DELTA) below the current stock price

Based on 23rd December 2019

Category: Open Above 1M 5M EMAs