I've mentioned in my blog in the past that I am always on the lookout for rejection bars.

These visual clues give you a heads up on a likely directional trade.

Multiple bars with tails can show where price movement has hit a road block.

This is the Dax chart of yesterday afternoon and the morning session today.

I highlighted the major areas but you can see a few minor areas that the tails held a move.

DAX tails.jpg (132.12 kb)

A few posts ago I decided to concentrate on currencies to free up some time for myself.

Focus on one thing and hit the setups as they appear.

Guess what, that completely went out the window and I have been trading everything.

The Dax, ES, Hang Seng, SPI, stocks and currencies.

It was just too boring for me.

Over the last 10 years I traded hundreds of times a day and to just trade in the single figures was like watching paint dry.

The good thing for me is that my style has tightened up and the results have been consistent over the various instruments.

January results were positive $47,000 which was reasonable considering I spent a few weeks away from the market.

I feel I am finding my footing on the Dax with some consistent results and I feel very relaxed with my trade style and risk.

Today I traded the Dax with an initial long trade that failed.

Instead of just closing out the trade for a loss, I reversed the position as the structure looked like it had changed to favour a downside bias.

In trader development this is one of the most difficult things to do in an objective manner while trading real time.

There is a fine line between reversing for a new setup versus reversing because you're revenge trading.

Revenge trading has been a specialty of mine which has provided some of my biggest losses over the years.

The only way for me to stop this mental problem has been to have a consistent structure for every trade I take with pre-planned what if scenarios.

I know I am trading well when I can adapt to new information quickly and act decisively.

Below is the Dax trades for the first 2hrs of trade.

Dax1min.jpg (93.52 kb)

Trade results.jpg (75.43 kb)

Just back from a camping trip at Lennox Heads in North NSW.

We met Philippe and his son Sebastian who our boys had a great time with.

Philippe was camped next to us and is a trader who has been to a couple of my talks and a reader of the blog.

It is amazing where traders pop up, it almost feels like some sort of religious sect. (we may need a secret handshake or something)

Although the surf was non existent, the beers were cold and the beaches and lake were great for the kids.

It's funny how our boys enjoy camping much more then hotels, I'll just have to get better at the 6.00 am mornings when the birds start squawking.

TRADING/INVESTMENT COSTS

I read this article recently that shows the difference that fees have on investment returns over longer term time frames.

It also has implications for traders and their brokerage costs over time.

The blog is from the UK but with the exorbitant fees Australia's wrap funds charge all the more important for super funds.

http://davesbrain.blogs.com/mindmoneymarkets/2010/01/costs.html

I'd like to thank everyone who reads the blog for their support over the last year and those with blogs that have recommended my site.

Today the site had it's 15000th visit over the past 12 months with over 40000 page views which I find quite remarkable as I am quite low key.

One of the comments in the previous blog asked about structure.

As I developed my trading skills I picked up on support and resistance areas and how to trade some setups from these areas depending on price action.

I began to get a feel for when selling strength moved to equilibrium and then to buying strength through hours spent in front of the computer.

Anticipating these areas is pretty much what is required to make profits through trading.

The importance of structure in market trading really became apparent to me when I worked with Alexander at Pride Trading.

His trades are primarily based on structure with zones of support/resistance providing targets with a high degree of accuracy.

I learned about inside bid and ask zones and how they skew odds for directional moves.

I have marked up the current Euro fx futures showing basic structure areas.

Structure EUR.jpg (182.43 kb)

Once the structure is clear, entries can be based on a successful test or failure of these zones.

We can ascertain if the market is trending or range bound and adjust targets accordingly.

On the euro at present if the inside bid zone holds my potential trades are biased to trading the long side.

If we break through the inside bid to the down side I can look for a retest fail of the zone to give me a high probability low risk trade down.

Understanding structure in the market alows us to trade a plan that fits changing odds in real time.