Chart Basics and Price Action: Video 02C Flashcards
Price Action: Is everything important?
Yes. Never dismiss anything as not important. Very often something that initially appears minors, leads to a great trade. Algorithms use logic.
What is a pain trade?
A low probability/Surprise event. Whenever something appears unlikely, it can lead to a big move. Whenever something is highly likely, the it is probably not as likely as it appears to be. Any event that seems unlikely when it occurs and traps one side.
Professional Traders get trapped all of the time. Do they get upset?
NO
Why do professional traders love the pain trade?
Because it is a breakout. There is a high probability of big profit. They don’t get emotional. Just enter quickly in the direction of the new trend.
Do traders know that 80% of breakouts fail? So what is it bets to do?
Yes. Find a place to exit and be profitable.
When it looks like the obvious might happen, always think….
The opposite might happen
True of false: 90% of bars on charts are within trading ranges?
True. Only 10% are in breakouts. markets are always transitioning from trading ranges to breakouts and vice-versa.
