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

Book Description

A timely guide to profiting in markets dominated by high frequency trading and other computer driven strategies

Strategies 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 participants

Engaging 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

Table of Contents

  1. Cover
  2. Half Title
  3. Series Page
  4. Title Page
  5. Copyright Page
  6. Dedication
  7. Preface
    1. Who This Book Is For and Why It's Important
    2. Fibs Make the Moves
  8. Acknowledgments
  9. Chapter 1: Today's Trading Environment
    1. Players on the Field
    2. The Algo Brothers
    3. Where Are You?
  10. Chapter 2: Inside the Hidden Market
    1. Deep Roots
    2. Fibonacci Basics
    3. Fibs Make the Moves
    4. Why Do Fibs Work?
    5. Fibs in the Real World
    6. In Summary
  11. Chapter 3: Drawing a Road Map
    1. A Mountain Range of Price
    2. Obstacles in the Road: Pivot Points
    3. Navigating Trends
    4. Long and Winding Roads
  12. Chapter 4: More Tools for Trading Power
    1. Watching the Clock (and the Calendar)
    2. Tick Tock
    3. The Tape and the DOM
    4. The DOM (Depth of Market)
    5. A Full Toolkit
  13. Chapter 5: The 90 Percent Factor—Executing Your Trade
    1. Priorities and Job One
    2. What's the Risk, What's the Reward?
    3. A Brief Pit Stop
    4. Preparing the DOM
    5. Crossing the Starting Line
    6. Running Off the Road
    7. When Multiple Contracts Just Aren't Possible
    8. Why 90 Percent?
  14. Chapter 6: Three Types of Trade Setups
    1. The Traditional 50 Percent Measured Move
    2. The Extension 50 Percent Measured Move
    3. The 61.8 Percent Failure
    4. Why Is This Important to Your Trading?
  15. Chapter 7: Using Multiple Time Frames to Trade
    1. Time Frames and Russian Dolls
    2. The Path of Least Resistance
    3. Trading the Trend
    4. What Time Frame Should We Look At?
    5. Why Is This Important to Your Trading?
  16. Chapter 8: Three Entry Strategies for Retracements
    1. The Goal
    2. The Three Entry Strategies
    3. The Progression of Entries
    4. Why Is This Important to Your Trading?
  17. Chapter 9: The Seasonality of Markets and the Best Times to Trade
    1. The Big Picture
    2. A Money Manager's Year
    3. The Days
    4. The Hours (Best and Worst Times to Trade)
    5. The Worst Times to Trade
    6. The Typical Money Manager
    7. Why Is This Important to Your Trading?
  18. Chapter 10: Tools for the NYSE
    1. Lagging versus Leading Indicators
    2. Tools for the NYSE
    3. Using All the Tools Together
    4. Why Is This Important to Your Trading?
  19. Chapter 11: Tick Extremes and Divergences
    1. The Types of Tick Extremes
    2. Tick Divergences
    3. Why Is This Important to Your Trading?
  20. Chapter 12: Profiting from Gap Fills
    1. What Is a Gap?
    2. The Types of Gap Fill Scenarios
    3. Gap Fills to Avoid
    4. Gap Fill Percentages
    5. The Gap Fill Workflow and Filter
    6. Entries
    7. When Gaps Don't Fill
    8. What to Do?
    9. Why Is This Important to Your Trading?
  21. Chapter 13: How to Manage Positions and Take Profits
    1. The Rule for Measured Moves
    2. The Distance Formula
    3. Trailing a Series of Measured Moves
    4. After the Confirmation of Trend
    5. Using the –23 Percent Profit Target: Take Profit on the Time Frame You Entered the Trade
    6. Why Is This Important to Your Trading?
  22. Chapter 14: Risk Management (Advanced Trade Management)
    1. Bob the Trader
    2. Curtis the Contractor
    3. Risk per Trade
    4. How Many Futures Contracts Should I Trade?
    5. Stop Placement
    6. The Free Trade
    7. The Reduced-Risk Trade
    8. Why Scale Out?
    9. Pick an Instrument and Focus on It
    10. Trading the News Is Gambling
    11. Why Is This Important to Your Trading?
  23. Chapter 15: The Inner Trader
    1. Mentality
    2. Money Management
    3. Emotions
    4. How Long Does It Take for a New Trader to Trade Well?
    5. Attitude
    6. Trading Well versus Trading for Profit and Emotional Capital
    7. The Phases of Measured Moves
    8. The Series of Measured Moves
    9. Basic Traditional Measured Moves
    10. The Progression of Measured Moves
    11. Why Is This Important to Your Trading?
  24. Chapter 16: The Trading Plan
    1. The Four Legs of a Trading Strategy
    2. Why Trading Rules
    3. General Trading Account Rules
    4. Gap Fill Trading Rules
    5. American (NYSE) Session Trading Rules
    6. European (Euro) Session Trading Rules
    7. Setups
    8. A Trading Journal
    9. Why Is This Important to Your Trading?
    10. Bringing It all Together
  25. About the Author
  26. Index