How to Catch Directional Moves

Posted on Wednesday, April 17, 2019 at 4:22 PM

One of my chores is to write a weekly piece that enlightens traders. At times my interpretations are spot on, almost prophetic. And sometimes I am clueless. My 30 years of experience in the futures markets has taught me to accept, almost embrace, being wrong. Traders must embrace risk. No one likes being wrong, but accepting the possibility of a bad trade is a huge step for a trader. This industry requires us to accept that market movement is uncontrollable and unpredictable. It is a trader’s job to find the moments when probability favors a bullish or bearish wager.

Trading is a battle and a sport. Both require discipline. If you prefer to make directional or trend-type trades, make a list of conditions to increase the odds of catching directional moves.

Here are some of my favorites:

  • A series of five days with below average day ranges

  • Two weeks where the range is below the weekly norm

  • The closes are about midrange over a three-day period

When all these conditions are met, odds favor a breakout or vertical type trade.

John Seguin
Senior Futures Instructor
Market Mentor Mentoring, Inc.

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