Developing a Sense of Market Timing I

With the recent US jobs data, most of the traders in Wall Street would normally take a pause before any major reports are released. And as some have made it a point to trade from a confirmation with a volatile market and have generated a certain degree of success. For others the percentage of loss is greater as they try to simulate the same scenario with the Foreign Exchange market. But what is the ratio and probability of success versus a loss for the regular / retail investors turned traders for that matter. Quite an expensive price to pay!

In the exchange, we do have a mix of traders, market makers, institutional managers trading for client's accounts as well as their own. The viability of having access to certain information sometimes called in the stock market as the whisper numbers that circulates around purely on speculative basis.

Developing a sense of timing could either be both on a fundamental or technical stand point. More often than not is a technically motivated trader where numbers are plug-in on a trading system that would simply try to trade for itself. but the numbers and position is till derived from the trader / investor who wants either to buy or sell at a certain price. Most trades made are on short term basis that goes for 10-50 pips in between trades.

An application to maximize potential profits could be taken from a well developed trade plan that uses the basis of 4 sequential charts from an hourly, daily, weekly and monthly charting analysis. When all three out of four are in line then the probability of a profitable trade is more likely to happen. Using the hourly charts as entry and exit strategy application is more advisable rather than using them for positioning. The various time frames are geared to provide different signals that may be detrimental to the final trade, so it is equally advisable to implement at all time a time separator line that distinctively identify the time element involve in any such trades. Time management in proper positioning is vital too.

Monitoring prices for longer periods may also be contributing to misconceptions and misunderstanding of the market prices and its behavior. A certain correlation ship amongst the currency majors may also be best used in developing your sense of market timing as the ripple effects on the pairs are quite common. so the Technical tools accessible are only has good as the person's application in the trading process. If others are successful by using a combination of technicals, there is still no guarantee that the same will happen.

There is no " one size fits all " scenario. By having mentors and advisers along the way without having to worry about commission rebates or cash backs then one may be in better hands.

Good Luck and Best of trading for the week ahead!

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