What is your MAIN PLAY for today?

In our first blogs we have emphasized in how important it is to have a “feel” for the market and to use it to our advantage. 

Granted, some trades will be on their own (specially stocks in play due to earnings or news) but it is always a great thing when the market decides to “help” your position.

**One of the main tools we use in our office is the Taylor Technique. (Google it.. there’s plenty of articles on that). 

Here is how we use it.

FIRST: It helps identify what is called “The Play of the Day”. In simple terms what is the market expected to do. And please remember is all about probabilities so we always have a “what if” scenario.   

       Analyze a 2-3 day time frame

·         Identify the highest “odds” play

o   Expected to trade from High to Low?  Low to High?

o   What if there is a gap?

·         

          Play of the day:

o   Continuation from previous day trend?

o   Reaction in opposite direction?

o   Small range day. (usually after a big move)

·             

          ALWAYS watch the price action around the previous session highs and    lows

·         USE 60 minute chart for better sense of direction.

SECOND: We prepare a list of bullish candidates and another one with bearish candidates. (Separated from the gaps... those are “in play”).

And I know this sounds really simple / something that perhaps you don't really like doing BUT from experience I can tell that those traders that have a CLEAR WELL DEFINED PLAY at the beginning of the day do much better than those whom just jump into whatever stock is moving without a plan.

Just do it!  It takes only 5-10 minutes and will improve your trading in a big way.