Kam Dhadwar – Trade Execution & Trade Management

Kam Dhadwar – Trade Execution & Trade Management

Description

I am often asked what I look for when I trade and how can I reduce my risk.  First, you need to be familiar with the Market Structure as well as the opportunities that may exist.  You must have a vision for what the market might do next.  Before you can get in, you need to know and understand the potential market. Then “You must trade in the gap between where you are and where you want to be” (A popular quote by Ari Kiev).  Once you have this foundation, you can begin to build your belief and confidence through your perception of reality.-Time activity.  This is why it is so important to plan each trading day and every trade.

When it comes down to doing business and getting into a trade I personally watch  Price and how its moves around my levels and areas of doing business.  I also watch the volume trading of the Ask and Bid.

Much of trading is an Art Form so, just watching and reading the information alone is not enough,  you must also FEEL IT.  This takes practice and time, but it is possible to master it.  This feels like it’s topping or bottoming. It feels like it’s hitting bids well or lifting offers well.  That”s how I get into the rhythm and the feel of the market, that’s how I get in tune.  Trading Price and Order flow is about developing belief and confidence in a trading strategy.  It is important to use your emotions while trading.  I want to be able to trade as long as the premise is intact and the trade looks good. It also needs to feel good.  If I have doubts, it is time to exit.  If I really know what I am doing and the opportunity is that great the level of confidence I have in the trade should keep me in it,  once the confidence has gone so has the opportunity.  You can always come back in if you make a mistake.

To read order flow and trade with it for execution and trade management, you must ensure that you do not just watch the order flow but also make decisions.  You need to observe the impact of orders on price and understand the context and opportunity in which price was trading.  Some traders are tempted to look at the footprints and size, and then make decisions based on what they see.  This information is valuable, but it is not enough.  This information is useless as there is a buyer to every seller and a buyer to every buyer, regardless of the size of the trade.  200 sellers hit the Bid, filled 200 contracts from Buyers, so they cancel one another out.  It’s always Zero Sum.  Also one decent trade alone doesn’t move the market, especially a liquid market!   Its a competitive marketplace with many big players,  quite often trading against each other.

What then is useful? You must ask the right questions.

– Who is becoming more aggressive? Is it the buyers lifting the sellers’ offers, the sellers hitting the buyers bids, or the sellers offering to absorb the buyer lifting?

– What was the market able to achieve after those orders traded? If so, did those who appeared aggressive continue to be aggressive? Or did it just cease to exist?  What caused it to dry out?

– Where and at what prices is rejection occurring?  Acceptance occurs at which prices and where? what can it possibly mean  in this context?

The key to understanding the market and developing a feeling for it is to have the right mindset.  The right questions can influence your thought process.  If you have the right questions, the market can give you the right answer in the MOMENT.

Financial Development Course

Financial development is the ability to produce information about possible investments, allocating capital, monitoring companies, exercising corporate governance, trading and diversification, management of risks, mobilization of savings, and managing risk.