As well as the mechanics of the Price Ladder, a major part of learning to trade is understanding trading psychology – peoples’ motivation behind a trade, what their expectations are and where they will exit a trade should it not play out in line with expectations.
This information can often be ascertained from a chart, however in the event of market moving news, new positions are entered attempting to take advantage of this development – their motivation is short term and opportunistic, as such they will be more focused on price action than chart level and also more likely to exit the trade quickly if it does not continue in their direction.
A change in order flow can be the first clue that the news is not having the expected impact and when coupled with an appreciation of traders’ positioning and psychology provides a strong contrarian opportunity the recent ECB Sources are analysed in this live Axia daily debrief where a reversal of positioning creates a faster and larger move in the other direction.
Alternative trend reversal strategies based on order flow are considered in depth in Module 11 of the Jigsaw/Axia Institutional Training Course where multiple drills give you opportunity to trade them and perfect these skills.
In the price ladder video below, Richard discusses the action at the moment ECB sources came onto news wires stating that officials assume QE will end in a short taper. The sources comment appears hawkish on face value but as more information came out it was quickly realized that while they could taper within 3 months, there was no other plan beyond September.In response to this comment we see a fast move down starting at 158.74, then a rotation higher as further understanding is gained and its impact on trader psychology.
If you are looking to develop a career as a trader within a professional and successful environment then the AXIA Futures 8 week Intensive Trader Training is the most comprehensive in the industry based upon skill development within the proprietary futures trading environment.