Humboldttrader is a blog where we share our ideas to our subscribers. We started the blog several months ago initially as a way to document our trades for our own purposes. The idea never really involved selling subscriptions or monetizing the web page in any way. After tweeting some of our trade plans we realized that there are many people out there who are striving to achieve the same trading success as we have and the feedback we have received has been unprecedented. I began trading in July 2010 and spent many years trying to figure out how the market works. Like most I did not have any formal trading education or a finance degree so I spent 1000s of hours on the internet trying to find the magical system. Unfortunately there really isn’t one. There is no indicator combination that yields a solid consistent return despite the claims of many educators and marketers. A few years ago we discovered the concept of supply and demand and AMT (Auction Market Theory) and suddenly the results started to swing in our favour. The problem with mechanical green light red light indicator driven trade strategies is that none of them actually consider market participants and where willing buyers and sellers are likely to be positioned. A good example of this is if you take a 2nd hand car sales man and try to tell him he bought his inventory at the wrong price because it didn’t hit the 10 minute 47 EMA he will look at you as if you have 10 heads.
The ideas that we display here on the blog are driven primarily from looking at the market in such a way that we can work out areas where there is likely to be a huge imbalance of supply and demand. These areas are selected though market profile analysis and then put into context to derive an intraday trade plan. Another huge factor is that we work on the basis that less is more. Some traders take 20 trades a day but we focus on only taking 2 or 3 (plan permitting) where we have expectation of a good R2R scenario. The reality is that if you can get 3 or 4 points a day on ES at a reasonable size you can make a very nice living from day trading. Having this expectation is key as mindset is a huge factor in day trading and in many ways even more important that the strategy itself.