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A timely guide to profiting in markets dominated by high frequency trading and other computer driven strategiesStrategies employing complex computer algorithms, and often utilizing high frequency trading tactics, have placed individual traders at a significant disadvantage in today's financial markets. It's been estimated that high-frequency traders--one form of computerized trading--accounts for more than half of each day's total equity market trades. In this environment, individual traders need to learn new techniques that can help them navigate modern markets and avoid being whipsawed by larger, institutional players.Trading the Measured Move offers a blueprint for profiting from the price waves created by computer-driven algorithmic and high-frequency trading strategies. The core of author David Halsey's approach is a novel application of Fibonnaci retracements, which he uses to set price targets and low-risk entry points. When properly applied, it allows traders to gauge market sentiment, recognize institutional participation at specific support and resistance levels, and differentiate between short-term and long-term trades at various price points in the market.* Provides guidance for individual traders who fear they can't compete in today's high-frequency dominated markets* Outlines specific trade set ups, including opening gap strategies, breakouts and failed breakout strategies, range trading strategies, and pivot trading strategies* Reveals how to escape institutional strategies designed to profit from slower-moving market participantsEngaging and informative, Trading the Measured Move will provide you with a new perspective, and new strategies, to successfully navigate today's computer driven financial markets

Trading the Measured Move: A Path to Trading Success in a World of Algos and High Frequency Trading

Preface xiiiAcknowledgments xviiCHAPTER 1 Today's Trading Environment 1Descent of the Pit and Ascent of the Screen 1Players on the Field 2The Algo Brothers 4Where Are You? 7CHAPTER 2 Inside the Hidden Market 9Deep Roots 9Fibonacci Basics 11Fibs Make the Moves 15Why Do Fibs Work? 19Fibs in the Real World 21In Summary 26CHAPTER 3 Drawing a Road Map 27Finding Direction 27A Mountain Range of Price 28Obstacles in the Road: Pivot Points 32Navigating Trends 35Long and Winding Roads 37CHAPTER 4 More Tools for Trading Power 39Filling the Toolbox 39Watching the Clock (and the Calendar) 39Tick Tock 43The Tape and the DOM 46The DOM (Depth of Market) 49A Full Toolkit 51CHAPTER 5 The 90 Percent Factor-- Executing Your Trade 53Where the Rubber Meets the Road 53Priorities and Job One 53What's the Risk, What's the Reward? 55A Brief Pit Stop 59Preparing the DOM 60Crossing the Starting Line 61Running Off the Road 65When Multiple Contracts Just Aren't Possible 66Why 90 Percent? 68CHAPTER 6 Three Types of Trade Setups 69The Traditional 50 Percent Measured Move 69The Extension 50 Percent Measured Move 74The 61.8 Percent Failure 78Why Is This Important to Your Trading? 82CHAPTER 7 Using Multiple Time Frames to Trade 83Time Frames and Russian Dolls 83The Path of Least Resistance 84Trading the Trend 85What Time Frame Should We Look At? 86Why Is This Important to Your Trading? 91CHAPTER 8 Three Entry Strategies for Retracements 93The Goal 93The Three Entry Strategies 95The Progression of Entries 101Why Is This Important to Your Trading? 101CHAPTER 9 The Seasonality of Markets and the Best Times to Trade 103The Big Picture 103A Money Manager's Year 105The Days 107The Hours (Best and Worst Times to Trade) 109The Worst Times to Trade 110The Typical Money Manager 111Why Is This Important to Your Trading? 111CHAPTER 10 Tools for the NYSE 113Lagging versus Leading Indicators 113Tools for the NYSE 114Using All the Tools Together 121Why Is This Important to Your Trading? 122CHAPTER 11 Tick Extremes and Divergences 123The Types of Tick Extremes 123Tick Divergences 124Why Is This Important to Your Trading? 129CHAPTER 12 Profi ting from Gap Fills 135What Is a Gap? 135The Types of Gap Fill Scenarios 136Gap Fills to Avoid 136Gap Fill Percentages 137The Gap Fill Workfl ow and Filter 140Entries 141When Gaps Don't Fill 142What to Do? 143Why Is This Important to Your Trading? 144CHAPTER 13 How to Manage Positions and Take Profits 147The Rule for Measured Moves 147The Distance Formula 148Trailing a Series of Measured Moves 150After the Confirmation of Trend 152Using the -23 Percent Profit Target: Take Profit on the Time Frame You Entered the Trade 152Why Is This Important to Your Trading? 155CHAPTER 14 Risk Management (Advanced Trade Management) 157Bob the Trader 157Curtis the Contractor 159Risk per Trade 160How Many Futures Contracts Should I Trade? 160Stop Placement 161The Free Trade 162The Reduced-Risk Trade 162Why Scale Out? 162Pick an Instrument and Focus on It 163Trading the News Is Gambling 163Why Is This Important to Your Trading? 163CHAPTER 15 The Inner Trader 165The Emotions of a Trader 165Mentality 165Money Management 166Emotions 167How Long Does It Take for a New Trader to Trade Well? 168Attitude 169Trading Well versus Trading for Profit and Emotional Capital 170The Phases of Measured Moves 172The Series of Measured Moves 174Basic Traditional Measured Moves 174The Progression of Measured Moves 178Why Is This Important to Your Trading? 178CHAPTER 16 The Trading Plan 179Keeping Yourself Safe with Statistical-Based Rules 179The Four Legs of a Trading Strategy 179Why Trading Rules 182General Trading Account Rules 183Gap Fill Trading Rules 185American (NYSE) Session Trading Rules 186European (Euro) Session Trading Rules 188Setups 189A Trading Journal 189Why Is This Important to Your Trading? 190Bringing It all Together 190About the Author 193Index 195