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Nana's Notes
by SherylTrades
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I knit, I fish, I Nana. Retired microbiologist turned day trader, going on three decades with the markets.
This newsletter does not constitute financial advice, and reflects only the personal views of the author. Making money with day trading is notoriously difficult; please see MFT's earnings disclaimer here.
Your charts are hurting my eyes...
Dear Market Flow Trader Family,
It’s been a challenging couple weeks for the market, pulling back almost four percent since July’s highs. Our last meaningful pullback was in March, so some of you have not seen this kind of price action before. Thankfully, our setups at Market Flow Trader work in both directions! I’ve got a thick red line on my chart at 4450, a significant point of resistance on the ES dating back over a year. I will be watching that level for opportunities this week.
If you had the opportunity to look at professional traders’ charts, you might be amazed at how sparse they appear in contrast to your own. There is a reason for that: nearly every line, level, and indicator available in your charting software relies primarily on historical price data. Too much of this can lead to redundancy, noise, and honestly, unnecessary distractions. More is not always better.
"The market has a good memory. Do you?" ~SageFT
The lines of support and resistance we draw pre-market in the Market Flow Trader Community (aka Market Chatter) are places where big buyers and sellers have already determined where *your preferred ticker* is a buy, and where it is a sell. Eighty percent of all trading days are “inside days,” trading within recent highs and lows. The market has spoken. We would be foolish to not listen (and take notes). My lines are drawn from yesterday’s open and close, the overnight high and low, and obvious recurring levels on the 4-hour chart. I add intraday lines as they occur. Patrick Wieland's strategy includes pivots as well.
Also, most agree that a moving average or two and the VWAP (volume-weighted average price) are good visuals for identifying the trend. As you determine which moving averages work for you, remember that the 8MA on the one-minute chart only provides eight minutes of data. To make good trading decisions, improve your win rate, and take fewer trades every day, identify the trend on the larger time frames, and your entries on the lower. Short trades only below the VWAP and long trades only above, with your moving averages in agreement, using the proven setups we practice every day. That’s it.
I wish I could make this sexier or more exciting. It’s just not. In fact, by restricting your trades to only when the moving averages on all time frames and VWAP are in agreement, you won’t get any of those sexy reversal trades. You won’t get to tell the trading room or your roommate or dog you are a genius for calling the top or bottom. However, if you truly want to impress the trading room, partner, or dog, follow the rules, make your money, finish by 11:00 a.m., and walk away. Whether you are growing your personal account, working your way through the TopStep Combine, or still honing your edge in simulation, THIS IS THE WAY!
If you spend any amount of time with us in Market Chatter, you know that Sage is demonstrating A+ setups every day. He may point out three to five of those a day. He spends much more time discouraging trades, and that kind of guidance, from a trader of 25+ years, is priceless. I hope you’ll join us pre-market and get a head start on your homework.
For more on the topic of Making Day Trading Simple, I recommend Patrick’s video he published on his channel yesterday.
To your Success,
SherylTrades
