$SPX for the week 16 Apr 2018
Trading is not about forecasting! The chart below explains and being flexible to price action allows a change in trading direction.
Should I be long or short?
The chart below shows the range and the areas where I will change from looking for longs or shorts and vice versa. Firslty from a trend trading point of view wating for clear direction is preferable. Shorter term trades within the range should be managed closely.
The wide range is between ±2500–2900, the thick red lines on the chart.
Within that, the pink line marks ± the mid point of the narrower range marked by the vertical brown dashed line. In that area the green boxes mark the areas where I think the bulls or bears might gain some control. A move into the lower green box and I think there will be an overshoot of the 200 day and a move down to 2400/40. A move into the upper green box and I think the all time highs will be tested. The clear area between the green boxes is a neutral zone.
How will I trade this information? In the neutral and upper green areas I will be looking for short-term long trades. In the lower green box I will be looking for short-term short trades and being very mindful that I could get caught in a bear trap. I will probably sit on the sidelines rather than go short, however price action at the time may change my mind. That is what trading rather than forecasting allows…a change in stance based on what is happening at the time, being flexible and trading the information given by the chart.
Conclusion: I am still standing aside from longer term trend trades and will look at shorter term trades managed tightly and may change my mind very quickly based on new information, it is a trader’s prerogative.
Hopefully the above helps you to further your trading. If you have any questions then please feel free to contact me on my FB page or email Miguel@TraderMig.com
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Good trading.
Miguel — TravelingTrendTrader
Email: Miguel@TraderMig.com
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