Trading Tends in the markets. Well 2016 came in with a big bang in the markets, flush to the downside. But downtrends don’t last forever.   As a trader you must learn how to identify trading trends. A downtrend will end when it makes higher lows from the previous lows.  And if the market has been down through the morning session, you will often see a reversal of the trend in the afternoon. So the current trend will have a longer move than the sub trend or pull back. So when using the autotrader I like to identify the trend and then trade it looking for only longs or shorts.  Negative news in the market will cause it to be down most of the morning session. And in Janauary 2016 that is how the markets have been working.  And the ranges currently in the violate market are wider than they were 4 months ago.  So you have to be able to recognize current market conditions. Not just wake up, turn on you computer like its just another trading day.

Markets go through cycles and change every 3-4 months. So the YM was trading down on this particular trading day through the am session. So downtrend cannot last forever, buyers will come in the afternoon and buy the lows and sell at the highs end of day. So when the market is in these real long downtrends or uptrends that last hours its best to have the autotrader just trade in one direction of the trend. So on this afternoon we ran the autotrader and selected to trade only the uptrend as markets were down through the am session.

And as the charts below show you can see the uptrend was more profitable, had bigger moves than the down trend.  So for those of you using the autotrader look to trade in one direction, you will have lesser trades and make more money. For more info on the autotrader visit www.trading123.net/autotrader/

 

YM 03-16 (Trading123Renko 2-6) 1_12_2016385

YM 03-16 (Trading123Renko 2-6) 1_12_2016490s