No More Need to Trade by Chasing Carrots

02/26/2017 6:00 am EST

Focus: STRATEGIES

Troy Epperson on TraderKingdom.com uses the analogy of the donkey chasing a carrot hanging from a stick a few inches in front of its nose as it relates to trading and maps out how real-time trading tools have now put the carrot within the trader's reach.

Just like most retail traders, the donkey keeps chasing the carrot because he believes he is about to get it.

You know the image of the donkey being led around as it chases a carrot hanging from a stick a few inches in front of its nose? It's real funny until you realize you are the one who has been played as the donkey by the elite institutional traders.

For years, retail traders have been tricked by the elite institutional traders. You have been told to watch the price of an asset and use all sorts of lagging indicators to find your best entry and exit points.

But your trades almost never got the carrot. And even when they did it was just a little taste.

Now, you have the ability to find out why.

Why Do Your Trades Never Get the Carrot?

You have always been so close you just knew that you would get there next time around. And next time ended up about the same as the last. Why?

The elite institutional traders have always used real-time data and analysis for positioning their trades. Retail traders have been using lagging indicators like simple moving averages and trend lines. That left the average retail trader at least six to ten ticks behind the institutions.

When you are chasing price from a few ticks behind the market, you will always come close to the carrots of profitable trades, but you will rarely grab them consistently.

The only path to consistent profits in the futures market is to use the same real-time data as the elite institutions. Then you will be trading with them rather than trying to catch them from behind.

But how do retail traders get this real-time data?

What Is Different Now?

In the past, it took expensive and sophisticated trading software to access and interpret real-time market data. Data that was available to anyone.

However, having the same access to the data being used by the institutions did not mean you had the ability to see all of the details their trading systems provided them. Or, how to make money-making trading decisions from what you saw.

These trading systems now allow retail traders to see market data in real time instead of constantly trading six-ten ticks behind the institutional traders. Retail traders can now see how the carrot they thought they could grab was never really within reach.

Even better, real-time institutional order flow sequence tools allow you to see exactly what the institutions are doing as they are doing it. Now quit chasing the profit carrot with the lagging indicators you have been using. Instead, you will begin using order flow sequence tracking as a complete system to position your trades right alongside the institutions.

How Do Real-Time Tools Help You Trade with the Elite Institutions?

When the price is rising but the aggressive buy orders are falling, price direction is likely to change.

One example of the real time tools these systems contain is our sequential volume decline tool. This tool can help you see when the institutional orders to buy or sell are drying up and signaling a reversal before the price actually changes direction. To read the entire article, click here.

By Troy Epperson, Contributor, TraderKingdom.com

Related Articles on STRATEGIES