Decision Areas In Daytrading by Peter Hill
It’s impossible to know when the market will suddenly turn and move in another direction. But there are tools you can apply to your charts to identify those probable turning points. Here’s a simple technique any intraday trader can use.
A trader with a small account is in a precarious situation judging when to take a position or to stay out of the action. He is normally a person who wants to be trading in the markets, who is anxious to be involved and often thinks more of the reward than the risk. This is the reason that so many people who try to scalp—that is, take intraday positions for short periods trying to capture a few points during the day—so often come to grief. Trying to guess which way the market will go from one minute to another is a perilous adventure. Often, you can be right in one time frame and wrong in another, and if you’re wrong in the smaller time frame, it may be too late for you by the time you’re justified in the longer term...