Context - Living in the now

There are no set parameters in trading. While any methodolgy is based

on the idea that certain patterns repeat, the overall context of the
action must always come into play. What is the most likely scenario
based on what you are seeing right now?

These labels are for illustrative purposes. There is obviously no way to

reduce and label every type of price action that may occur but you will
generally see some variation of the following descriptions.

Four types of action:

1. Game on - Everyone is itching to play. Traders are firing, taking shots,

attempting to defend positions and attempting to create momentum.
They are sitting tight when they're on the right side and puking out
when they're on the wrong side. There is a steady flow of volume. We
see this around news releases as well as pressure points such as
breakouts or defensive plays around highs, lows, steps in the profile or a
price that seems to be holding strong.

2. Slow but methodical - Traders who swing large size are trying to
position themselves for a move but doing so in a very slow and
methodical way. This action can look like it offers no opportunity but, in
fact, can yield very good trades if you have the patience to sit and wait.
We usually see this later in the morning or afternoon after the initial
reactions to news have setted.

3. Suck you in / Trap you - This is the action that makes you think
something is going to happen when, in reality, the odds are that nothing
at all is going to happen and you will either sit in a trade for an hour
without the market moving or get hooked on the wrong side and blow
out at the exact turning point which brings it back to your price. Most of
the major players as well as short-term scalpers have already made
their moves and the only people currently trading are large institutions
who have to monitor the markets all day and short-term traders who
are down money and hoping to get their money back.

4. Game over - Total flatline. No action. No trade is better than a 50/50

shot. This is normally what you will see around holidays, rollover
periods, and days when everyone is awaiting a major release such as
unemployment, FOMC, etc. It also happens at some point every day
when winners leave, losers throw up their hands and leave, and large
institutions have nothing to do.

*Who's going to hit the next price?