Brandon Wendell, CMT
Brandon Wendell
From time to time I discuss more advanced trading tactics and even technical indicators that I feel may enhance a newer trader’s ability to read price. However, you must realize that these techniques are designed to help you with identifying the price levels for trading. They are not to be your sole decision making process.
We need to keep our trading as simple as possible. Focus our decisions on when to buy or sell based on Online Trading Academy’s Core Strategy involving trend with supply and demand. That is the core strategy that we base our trading on and what we teach in our Professional Trader course. When we are sitting down to find trades, the first thing we need to do is to identify the trend we are trading in and even the trend of the larger timeframe. The trend will tell us whether we will have greater probability taking longs or shorts in our trading.
Once we discover the probable direction, we then need to identify the best entry and exit zones. I equate trading to riding a train. You first find a train moving in the direction you want, (the trend), and then board at a station (supply & demand zones). Trying to board the train between stations while it is in full motion is extremely risky just as it is financially risky to jump into a trend when it is not at a supply or a demand level.
We buy at demand and sell at supply for several reasons:
It is the area where we expect prices to resume a fast movement after a pause in the trend. If we are wrong, then we will have very small risk as our stops will be in a logical place that is very close to our entry.
By entering near the beginning of an impulse, (the dominant move in the trend after a correction), we are going to have greater profits than if we jumped in later as the trend was already moving.
If we buy or sell with the trend and in those supply or demand zones, we will have a higher probability of the trade working out.
When we trade, we want high profit potential, low risk, and high probability for our trades. This is a key to success. So how do the advanced techniques fit into our trading? They give us another perspective of price and can increase our confidence in taking a trade. You have to use those indicators properly though. Buy and sell signals in the indicators will always happen after we are moving away from the supply or demand levels so they are late. Divergence between an indicator and the price of your security or the indicator sitting in an overbought or oversold zone when we are hitting a supply or demand zone is an odds enhancer for your trade.
Trading is rules-based and needs to be as emotionless as possible. If you are unsure of the rules or how to identify the trend, supply or demand, then visit your local Online Trading Academy center and take a course. Proper education is the best way to protect your capital and grow your money consistently.
Neither Freedom Management Partners nor any of its personnel are registered broker-dealers or investment advisers. I will mention that I consider certain securities or positions to be good candidates for the types of strategies we are discussing or illustrating. Because I consider the securities or positions appropriate to the discussion or for illustration purposes does not mean that I am telling you to trade the strategies or securities. Keep in mind that we are not providing you with recommendations or personalized advice about your trading activities. The information we are providing is not tailored to any individual. Any mention of a particular security is not a recommendation to buy, sell, or hold that or any other security or a suggestion that it is suitable for any specific person. Keep in mind that all trading involves a risk of loss, and this will always be the situation, regardless of whether we are discussing strategies that are intended to limit risk. Also, Freedom Management Partners’ personnel are not subject to trading restrictions. I and others at Freedom Management Partners could have a position in a security or initiate a position in a security at any time.
Editors’ Picks
EUR/USD appears supported by the 200-day SMA, for now
Following an early pullback to multi-week lows near 1.1670, EUR/USD now manages to reclaim the 1.1700 region as the NA session draws to a close on Monday. The steep retracement in spot follows the equally strong move higher in the US Dollar, as investors continue to assess the geopolitical landscape in the wake of the US and Israel attacks on Iran.
GBP/USD hits new yearly lows near 1.3300
GBP/USD adds to the recent bearish tone, approaching to the key 1.3300 support to reach fresh YTD troughs against the backdrop of the robust performance of the US Dollar. Indeed, Cable’s decline comes amid the firm demand for the safe-haven space in the wake of the US and Israel attacks to Iran.
USD/JPY: Japanese Yen remains depressed vs. USD amid Middle East tensions; lacks follow-through
The USD/JPY pair catches fresh bids at the start of a new week and climbs back closer to last week's swing high, though it lacks follow-through and remains below the 157.00 mark through the Asian session. A coordinated US-Israel military strike on Iran marks a dramatic escalation of geopolitical tensions and unsettles global markets.
Editors’ Picks
AUD/USD consolidates around 0.7100 as geopolitical tensions counter hawkish RBA
The AUD/USD remains confined within a multi-week-old range, oscillating in a narrow band around 0.7100 during the Asian session on Tuesday. Bets for another interest rate hike by the RBA in May continue to act as a tailwind for the Aussie. However, a hit to sentiment from US-Israeli air strikes against Iran helps the safe-haven US Dollar preserve its overnight strong gains, reaching the highest level since January 20, and caps gains for the risk-sensitive Australian Dollar.
EUR/USD appears supported by the 200-day SMA, for now
Following an early pullback to multi-week lows near 1.1670, EUR/USD now manages to reclaim the 1.1700 region as the NA session draws to a close on Monday. The steep retracement in spot follows the equally strong move higher in the US Dollar, as investors continue to assess the geopolitical landscape in the wake of the US and Israel attacks on Iran.
Gold eases some ground, approaches $5,300
Gold now surrenders part of the earlier advance, reshifting its attenton to the $5,300 zone per troy ounce at the beginning of the week. Indeed, the yellow metal’s firm performance appears propped up by incresing geopolitical jitters in the Middle East, which at the same time fuels the demand for the safe-haven space.
Strategy lifts holdings to 3.4% of Bitcoin's total supply amid inflows into crypto products
Strategy continued its accumulation of the top crypto last week, acquiring 3,015 BTC for $204 million amid renewed interest in crypto products after four weeks of outflows.
The Fed is finally talking about AI – Here's why it matters for the US Dollar Premium
AI is moving from earnings calls into the heart of monetary policy discussions, forcing Federal Reserve officials to confront a new question: How to act if AI reshapes inflation, employment and interest rates at the same time?
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