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Profit Every Time You See Signs of Strength and Signs of Weakness in the Markets

Copyright 2006 Peter Woodhead

Financial In Market There are two questions that are continually asked:

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Oriental Trading 1. What do I do when I see signs of weakness?
2. What do I do when I see signs of strength?

Small Trading Capital with High Profit Potential Nowadays, the minimum amount needed to open a trading account is less than $300. Due to competition, some brokers may even accept much lesser amount. In Forex market, this small trading amount could potentially earn hundreds of dollars per week. In stock market, this may not be possible. Of course both market have potential to lose as well, but in the Forex market, traders can make good money with much lesser trading capital.

Financial Forex Forex Software Before these two critical questions can be answered, ALWAYS remember that true weakness comes in on an UP bar and ..

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Trading True strength ALWAYS comes in on DOWN bars.

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Trading Financial System On true signs of weakness you should:
a) initiate new short position(s)
b) reverse old long positions to short
c) close out any long positions

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Day Trading On signs of strength you should:
a) initiate new long position(s)
b) reverse old short positions to long
c) close out any short positions

Forex Financial Trading The Why is your reaction to a strong sign of strength (or weakness) so important?

Fortune Make Option Trading Because whenever a true sign of strength (or weakness) is seen the market makers and professionals will notice it straight away and act accordingly.

Science Of Financial Market So what is meant by a "true" sign of strength (or weakness)?

Future Trading You should observe a strong volume bar straight away to support your position.

Financial Sales Services If no such bar is present, that indicates that the professional money is not interested in the move because they know the market is still weak (or strong) and you can expect a move in the opposite direction to what you may have thought. Probably resulting in another period of accumulation or distribution before the next indicator.

Commodity Trading The Golden Rule:

Financial Services Trading Understand where the professional money is and follow them. If they aren't interested, neither should you be. If they are interested (shown by buying/selling), then back your judgement.

Online Forex Trading Most traders don't have a clue as to what's going on in the markets. But you will, if you take the time to understand how the professionals operate and what causes the moves in the market. You will get to time your entry and exit points to near perfection.

Financial Portfolio Trade For example: After a sharp move up you should expect a down move. After a strong bar up, sellers are tempted by the new high prices. This can be seen by any lack of follow through and the appearance of a strong down bar. Those who matter (the professionals) would see this, enter their positions, and force the market down.

Sierra Trading Post Conversely, after a sharp down move, you can expect weakness. Look for a classic "test" Look for the professionals entering the market and go with them.

Trading Financial Future It is essential that you really understand how the markets work before you start trading. So many people ignore this fact. That's why they never really "get it."

Forex Trading Software The master at how to trade like the professionals is a guy called Tom Williams. His "The Undeclared Secrets That Drive the Stock Market" is a classic. And is required reading.

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Trading System Peter Woodhead is the author of "Trade Your Way to a Fortune" and the webmaster of several Stock Market related websites.
http://www.HowTheStockMarketReallyWorks.com
http://www.LongLostStockMarketSecrets.com

Forex Trading System

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