Every day I wake up in the morning, I expect to do nothing with my day.

That is of course until the market tells me that it’s worth trading.

I can go an entire day without a single trade entered, and I won’t feel bad about it.

If the market is chopping sideways, there’s no decisive action one way or another, and both sides are getting crushed, then I want nothing to do with it.

Sideways movement means no one cares about a stock, volume is low, and there’s no reason you need to be long or short.

It can be hours before I see anything I like, and then BOOM, a stock is breaking VWAP upwards, and I’m in on the upside.

It can happen in a flash, and you want to be ready for when it does.

We make money by staying in cash to start every trading day.

That means we don’t hold stocks, options, bonds or whatever you can think of overnight.

This is because there’s no telling what the market will do from day to day.

One day it will rip higher on bullish Fed news, and the next it’ll come crashing down when job numbers get released.

It’s impossible to predict right now.

So don’t try and fight the market. Let it guide you and tell you where it’s going.

A good way to tell where the market is going is to wait 15 minutes until after the market opens to trade.

Don’t trade pre-market, don’t trade the opening bell.

Just wait.

After 15 minutes of initial chop, things settle down, and a trend will begin to reveal itself.

Take a look at today’s chart on the Q’s for instance…

You see that first move upward?

It lasted for five minutes

You see the next downward?

It lasted for 10 minutes.

Markets formed a bottom at $260.35 and started chopping sideways.

At this point you could have had your eye on two kinds of trades.

Since prices tend to revert back to VWAP, buying the Q’s at $261.00 was a good entry.

You would do this with a defined risk of course. You would set one two stops for your position one just below the lows of the day  at $260.35 and one at the pre-market lows at $260.00.

It’s $1.00 max risk to possibly make $6 or $7 on the upside.

If you’re buying 100 shares of QQQ, you’re risking $100 to make $700.


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