http://www.netpicks.com/dynamicprofitdetector -- Free Trend Indicator! I admit I like to scan charts of various instruments in advance of the trading day. This does not mean that I will get a trade off because I am looking for a particular setup at a particular location for the instruments of choice. What it does mean is that I am prepared for trading to take advantage of an opportunity in an area that has the potential to set up a trading opportunity. There are a few items that need to be covered in order for this to make any sense so that you may find some benefit in this approach see more: http://www.netpicks.com/prepared-trading/

1. Prepared For Trading
http://www.netpicks.com/prepared-trading/

2. I admit I like to scan charts of various
instruments in advance of the trading
day. This does not mean that I will get
a trade off because I am looking for a
particular setup at a particular location
for the instruments of choice.

3. What it does mean is that I am
prepared for trading to take advantage
of an opportunity in an area that has
the potential to set up a trading
opportunity.

4. There are a few items that need to be
covered in order for this to make any
sense so that you may find some
benefit in this approach.

5. For those that day trade, it is very
tempting to manufacture a setup that
in reality is not truly there. There are
many times in our trading careers that
we can justify a trade during a slow
period when you'd ignore it when
things are moving a little quicker.

6. If you plan out an area of interest in
advance of the trading session for a
selection of instruments, you give
yourself a few advantages:

7. You have a list of instruments that may
be approaching the "moment of truth"
so your trading session is spent on
probable trade setups.

8. You limit or abolish boredom trades
and that goes a long way in protecting
your trading business.

9. You immunize yourself to the talking
heads, rapid price moves, and any
other distraction that may make you
take an undisciplined trade.

10. Having a consistent approach in
trading can never be overstated.There
may be slight deviations however
attempting to maintain robot like
actions is a desirable trait. Having
points of interest goes far in keeping
you disciplined and consistent with
your trading method.

11. 1. Location is not just important in real
estate. A confluence of factors must
come together to form a location of
interest. This location hopefully is a
place of increased order flow that will
enable you to capitalize on the next
probable move.

12. What makes up the location?
It can be a combination of a few
factors but for me, previous price
structure, technical factors such as
trend lines, and potential
support/resistance levels can make a
potential confluence.

13. This is a chart of the 6E Futures from
last week. There are a few items I
noted using this 10 minute chart and
price information from previous days.

15. A. Horizontal line represents potential
resistance. This is not a conventional
line using price extremes as action
inside of the extremes presents more
and often better trading opportunities.

16. B. An inner trend line that uses
structure from inside of the extremes.

17. C. These were not really noted until
price was approaching the confluence
area however many classify these as "3
pushes". Price makes 3 drives
(impulse/correction) that are close in
price and time.

18. What we'd want to see is some sort of
price climax near our confluence zone.
The location was already chosen and
the only thing needed was price to
visit the location.

19. At that point, dropping down to a
lower time frame (2 minutes) to see
the price action helps determine if
there is a trading opportunity.

21. 2. Price activity near and at the
location. This is extremely important
because it shows the buy/sell pressure
at the location and the probable move
after the pressure exhausts itself in
either direction.

22. A. These candles stand out and given
the context, I am looking at a buying
climax into my predetermined area.

23. B. This bear candle is the largest bear
candle in the last 60 minutes.
Meaningless on its own but in the
location, it tells a story.

24. C. These two candles are holding the
lows but the upper shadow shows a
sharp rejection.
Other points to consider....

25. The daily chart is overall down.
We are currently in a small trading
range in the bigger picture.
This location is somewhat close to the
upper portion of the range.

26. Given all these factors including price
action in the location, a short trade is
opened. The stop is located above the
extreme instead of the smaller range
because getting popped out of a trade
due to noise can be very frustrating.

27. As well, the trade would be potentially
invalidated only if the upside was
broken.

29. A. Monitored at this location due to
the large influx of order flow that
caused the big green candles. There
was nothing at the base of that when
price returned that showed much
rejection.

30. B. If you compare these two areas, you
can see the lower one had more
"concrete" intention in regards to
interest and direction.

31. This was certainly not the "best"
area to exit because after a brief
consolidation, price dropped
about 40 point further.

32. It is very possible that price may have
reversed long before hitting the
location that was laid out.

33. This would have resulted in a missed
trading opportunity at this level
because chasing trades is not only the
sign of an undisciplined trader but also
detrimental to your account.

34. Is it possible to find locations during
the session that may setup trading
opportunities?

35. Finding locations while the day is
progressing is certainly viable.
The key is to have strict guidelines that
point to a change of state in the
current market condition.

36. This is a range the occurred and
completed about 40 minutes after the
trade shown above was complete. A
change of state from the strong
downside move that had occurred.

37. I personally want something to stand
out such as a rapid price move or an
obvious pattern before I even dig into
a chart mid day.

38. For context, the move down to this
range was full of larger red candles
than green candles on the lower time
frame. On the 10 minute chart, the
color was red until we had one green
candle (indicates lower time frame
pullback) that formed the range on the
trading chart.

39. Price had also broken back down
through the halfway mark of the
session high/low. The issue is we are
getting into the 12:00 lunch hour New
York Time.

41. A. Downside probe bringing buying
pressure into the market.

42. B. Upthrust that is rejected.

43. C. Range forms after upthrust with no
hint of buying pressure.

44. Being prepared in your trading
business is much better than finding
your trading chair moments before the
open.

45. You want to have a plan of attack so
you can take advantage of higher
probability trades that most often
occur at areas where there is a
confluence of factors including forming
structure and current price action.

46. There is no excuse for not preparing
for the trading day and being selective
in what you are going to trade that
session.

47. When preparedness meets
opportunity...success is often not far
behind.