If you are a regular reader of this blog , you might have noticed the market respects the Decision Points repeatedly. Almost always the price stalls at a decision point and decide about its new direction. Most of the time these levels are very accurate and they work like charm.
What is so special about these levels ? In fact there is nothing magical . It is all simple common sense.Let me explain.
A lot of traders use moving averages to trade the markets. They identify locations to initiate their trades in many ways. Some people enter on price crossover and some others on average crossovers. These traders use different moving averages to make decisions . This varies from 3 period to 200 period. Further,some of them use simple averages and others stick to exponential moving averages. In short these traders are identifying different locations to enter and exit their trades.
Story is not yet over. Traders are using these method on different time frames. Day traders normally use 1,2,3,5,10,15 minute charts. Try to mark all these levels on a chart. It will cover the entire chart space.
Now think about other methods like trend lines, Fibos, EW , and many other indicators. These people use different settings on different time frames. All these traders are divided and identify and trade different levels. In short there is no unity only diversity.
Now coming back to the Decision Points.These levels are fixed and visible to all the traders. There is no confusion or ambiguity about the levels. Previous day high is the previous day high for all. A BRN is a BRN for all. So all the traders monitoring these levels are going to act at the same level. Decision Point traders are united and they rule the divided rest.
Decision points are not my invention. Traders were using the levels for long. I just gave them a name. That is all. Decision Point traders are a few in numbers, I agree. But they are able to move the market because they trade big. They trade big because they are profitable.Most of the time they win because others are divided.
Do not trade what "you" see on the chart, trade what "all " see on the chart.
What is so special about these levels ? In fact there is nothing magical . It is all simple common sense.Let me explain.
A lot of traders use moving averages to trade the markets. They identify locations to initiate their trades in many ways. Some people enter on price crossover and some others on average crossovers. These traders use different moving averages to make decisions . This varies from 3 period to 200 period. Further,some of them use simple averages and others stick to exponential moving averages. In short these traders are identifying different locations to enter and exit their trades.
Story is not yet over. Traders are using these method on different time frames. Day traders normally use 1,2,3,5,10,15 minute charts. Try to mark all these levels on a chart. It will cover the entire chart space.
Now think about other methods like trend lines, Fibos, EW , and many other indicators. These people use different settings on different time frames. All these traders are divided and identify and trade different levels. In short there is no unity only diversity.
Now coming back to the Decision Points.These levels are fixed and visible to all the traders. There is no confusion or ambiguity about the levels. Previous day high is the previous day high for all. A BRN is a BRN for all. So all the traders monitoring these levels are going to act at the same level. Decision Point traders are united and they rule the divided rest.
Decision points are not my invention. Traders were using the levels for long. I just gave them a name. That is all. Decision Point traders are a few in numbers, I agree. But they are able to move the market because they trade big. They trade big because they are profitable.Most of the time they win because others are divided.
Do not trade what "you" see on the chart, trade what "all " see on the chart.
Hi, you just named it decision point but incidentally I posted some thing similar by name REFERENCE POINT trading in my blog today, as I promised it little while ago at my blog.
ReplyDeletewww.hornsandhoney.blogspot.in
Thank you for what ever you are.
Ding A Dong
Ding A Dong
ReplyDeleteGreat minds think alike.
.....Unfortunately so do stupid ones.
Just joking
ST
lol
ReplyDeleteGreat post as always. And sure, the DP's work like magic!
Thanks,
Thank You, SS
ReplyDeleteST
Wonderful post ST. thanks..
ReplyDeleteDear Sir,
ReplyDeleteThanks for the post.
May God always keeps you healthy, and wealthy.
Thanks a lot for the post again.
Siddarth
DPs are like traffic signals on the trading highway...
ReplyDeleteChose to ignore it and it can knock u off.
Respect it and u r safe...
:):)
Good write up...Thx
Hi ST:
ReplyDeleteAs usual a great article and the last line is what i really appreciate, it coincidentally appears to be my favourite line (Do not trade what "you" see on the chart, trade what "all " see on the chart.) :)
Regards
Vinod
@SBSB
ReplyDelete@Vinod
Thanks
ST