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More About This Title Trading the Measured Move: A Path to Trading Success in a World of Algos and High Frequency Trading
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Strategies employing complex computer algorithms, and often utilizing high frequency trading tactics, have placed individual traders at a significant disadvantage in today's financial markets. It's been estimated that high-frequency traders—one form of computerized trading—accounts for more than half of each day's total equity market trades. In this environment, individual traders need to learn new techniques that can help them navigate modern markets and avoid being whipsawed by larger, institutional players.
Trading the Measured Move offers a blueprint for profiting from the price waves created by computer-driven algorithmic and high-frequency trading strategies. The core of author David Halsey's approach is a novel application of Fibonnaci retracements, which he uses to set price targets and low-risk entry points. When properly applied, it allows traders to gauge market sentiment, recognize institutional participation at specific support and resistance levels, and differentiate between short-term and long-term trades at various price points in the market.
- Provides guidance for individual traders who fear they can't compete in today's high-frequency dominated markets
- Outlines specific trade set ups, including opening gap strategies, breakouts and failed breakout strategies, range trading strategies, and pivot trading strategies
- Reveals how to escape institutional strategies designed to profit from slower-moving market participants
Engaging and informative, Trading the Measured Move will provide you with a new perspective, and new strategies, to successfully navigate today's computer driven financial markets
English
DAVID HALSEY is founder of the website EminiAddict.com, which provides trader education and market commentary. His focus is day trading and swing trading stock index futures utilizing techniques designed to stay on the right side of institutional order flow and identify short-term setups. Halsey provides a daily market analysis, predictions, and an interactive forum for his subscribers. His videos are utilized by several brokerage firms and disseminated to their clients.
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Preface xiii
Acknowledgments xvii
CHAPTER 1 Today’s Trading Environment 1
Descent of the Pit and Ascent of the Screen 1
Players on the Field 2
The Algo Brothers 4
Where Are You? 7
CHAPTER 2 Inside the Hidden Market 9
Deep Roots 9
Fibonacci Basics 11
Fibs Make the Moves 15
Why Do Fibs Work? 19
Fibs in the Real World 21
In Summary 26
CHAPTER 3 Drawing a Road Map 27
Finding Direction 27
A Mountain Range of Price 28
Obstacles in the Road: Pivot Points 32
Navigating Trends 35
Long and Winding Roads 37
CHAPTER 4 More Tools for Trading Power 39
Filling the Toolbox 39
Watching the Clock (and the Calendar) 39
Tick Tock 43
The Tape and the DOM 46
The DOM (Depth of Market) 49
A Full Toolkit 51
CHAPTER 5 The 90 Percent Factor— Executing Your Trade 53
Where the Rubber Meets the Road 53
Priorities and Job One 53
What’s the Risk, What’s the Reward? 55
A Brief Pit Stop 59
Preparing the DOM 60
Crossing the Starting Line 61
Running Off the Road 65
When Multiple Contracts Just Aren’t Possible 66
Why 90 Percent? 68
CHAPTER 6 Three Types of Trade Setups 69
The Traditional 50 Percent Measured Move 69
The Extension 50 Percent Measured Move 74
The 61.8 Percent Failure 78
Why Is This Important to Your Trading? 82
CHAPTER 7 Using Multiple Time Frames to Trade 83
Time Frames and Russian Dolls 83
The Path of Least Resistance 84
Trading the Trend 85
What Time Frame Should We Look At? 86
Why Is This Important to Your Trading? 91
CHAPTER 8 Three Entry Strategies for Retracements 93
The Goal 93
The Three Entry Strategies 95
The Progression of Entries 101
Why Is This Important to Your Trading? 101
CHAPTER 9 The Seasonality of Markets and the Best Times to Trade 103
The Big Picture 103
A Money Manager’s Year 105
The Days 107
The Hours (Best and Worst Times to Trade) 109
The Worst Times to Trade 110
The Typical Money Manager 111
Why Is This Important to Your Trading? 111
CHAPTER 10 Tools for the NYSE 113
Lagging versus Leading Indicators 113
Tools for the NYSE 114
Using All the Tools Together 121
Why Is This Important to Your Trading? 122
CHAPTER 11 Tick Extremes and Divergences 123
The Types of Tick Extremes 123
Tick Divergences 124
Why Is This Important to Your Trading? 129
CHAPTER 12 Profi ting from Gap Fills 135
What Is a Gap? 135
The Types of Gap Fill Scenarios 136
Gap Fills to Avoid 136
Gap Fill Percentages 137
The Gap Fill Workfl ow and Filter 140
Entries 141
When Gaps Don’t Fill 142
What to Do? 143
Why Is This Important to Your Trading? 144
CHAPTER 13 How to Manage Positions and Take Profits 147
The Rule for Measured Moves 147
The Distance Formula 148
Trailing a Series of Measured Moves 150
After the Confirmation of Trend 152
Using the –23 Percent Profit Target: Take Profit on the Time Frame You Entered the Trade 152
Why Is This Important to Your Trading? 155
CHAPTER 14 Risk Management (Advanced Trade Management) 157
Bob the Trader 157
Curtis the Contractor 159
Risk per Trade 160
How Many Futures Contracts Should I Trade? 160
Stop Placement 161
The Free Trade 162
The Reduced-Risk Trade 162
Why Scale Out? 162
Pick an Instrument and Focus on It 163
Trading the News Is Gambling 163
Why Is This Important to Your Trading? 163
CHAPTER 15 The Inner Trader 165
The Emotions of a Trader 165
Mentality 165
Money Management 166
Emotions 167
How Long Does It Take for a New Trader to Trade Well? 168
Attitude 169
Trading Well versus Trading for Profit and Emotional Capital 170
The Phases of Measured Moves 172
The Series of Measured Moves 174
Basic Traditional Measured Moves 174
The Progression of Measured Moves 178
Why Is This Important to Your Trading? 178
CHAPTER 16 The Trading Plan 179
Keeping Yourself Safe with Statistical-
Based Rules 179
The Four Legs of a Trading Strategy 179
Why Trading Rules 182
General Trading Account Rules 183
Gap Fill Trading Rules 185
American (NYSE) Session Trading Rules 186
European (Euro) Session Trading Rules 188
Setups 189
A Trading Journal 189
Why Is This Important to Your Trading? 190
Bringing It all Together 190
About the Author 193
Index 195
