Shorting the Markets - Sell Short the Markets With ASX CFDs - Contract For Difference
Of course this market could just drop down to the next level ML1150.
(That's why scaling in is great - not pyramiding) Any how I want to touch on retesting the levels.
Let's just say for the purpose of the exercise, that when a market moves though a Trading level it comes back and retest that level, this could be long or short.
I very rarely just move in when a level is penetrated, the cases where I would is where I can manage risk, that is keep the financial risk absolutely minimal.
A reasonable example of this would be LEI right now, it has penetrated TL5, and so I could simply place the stop above today's high, which is above the major level.
This is more a bet that is weighted in my favour, but I also understand that Trading Level 5 is the second strongest number, so there is a high probability that market will be choppy at this level and stop the trade out, once again scaling into positions helps manages the risk.
Waiting for the retest is a safer trade.
If the retest fails to penetrate the major Trading level, then we have a sign of weakness, we can start to use the minor Trading Levels in this case mTL8 (1280) and the next level is mTL5 (1250) you can treat these levels in exactly the same way as the retest at the major level but on an intra day time frame.
( There are only a handful of patterns in theory that occur at levels) The other very important factor is the volume (there are articles on the site about volume) Todays volume was 166,319 which is less than yesterday and the range in the bar is less, so we can expect a small bounce around 12.
00 check the market depth for any large order sitting on both sides of the depth.
The volume can also be understood in larger blocks.
If this market moved back up to TL13 on lower volume this would be a sign of weakness, the total of the market depth can also help, but this also depends on the total turnover of volume for the day, in the case of this stock there are 25,335 on the buyers side and 56,305 on the sellers side and the volume turnover was 166,319 so in this case the market depth is important.
( the course of sales is also very important in faster markets - but that is more day trading skills) So to short this market or other like it we want to see divergent in price and volume, that is to see this market move up low volume, you don't need indicator to see this, in fact they just get in the way, stay with the facts, the price and volume - look at them from different perspectives, the penny will start to drop.
(That's why scaling in is great - not pyramiding) Any how I want to touch on retesting the levels.
Let's just say for the purpose of the exercise, that when a market moves though a Trading level it comes back and retest that level, this could be long or short.
I very rarely just move in when a level is penetrated, the cases where I would is where I can manage risk, that is keep the financial risk absolutely minimal.
A reasonable example of this would be LEI right now, it has penetrated TL5, and so I could simply place the stop above today's high, which is above the major level.
This is more a bet that is weighted in my favour, but I also understand that Trading Level 5 is the second strongest number, so there is a high probability that market will be choppy at this level and stop the trade out, once again scaling into positions helps manages the risk.
Waiting for the retest is a safer trade.
If the retest fails to penetrate the major Trading level, then we have a sign of weakness, we can start to use the minor Trading Levels in this case mTL8 (1280) and the next level is mTL5 (1250) you can treat these levels in exactly the same way as the retest at the major level but on an intra day time frame.
( There are only a handful of patterns in theory that occur at levels) The other very important factor is the volume (there are articles on the site about volume) Todays volume was 166,319 which is less than yesterday and the range in the bar is less, so we can expect a small bounce around 12.
00 check the market depth for any large order sitting on both sides of the depth.
The volume can also be understood in larger blocks.
If this market moved back up to TL13 on lower volume this would be a sign of weakness, the total of the market depth can also help, but this also depends on the total turnover of volume for the day, in the case of this stock there are 25,335 on the buyers side and 56,305 on the sellers side and the volume turnover was 166,319 so in this case the market depth is important.
( the course of sales is also very important in faster markets - but that is more day trading skills) So to short this market or other like it we want to see divergent in price and volume, that is to see this market move up low volume, you don't need indicator to see this, in fact they just get in the way, stay with the facts, the price and volume - look at them from different perspectives, the penny will start to drop.
