This is the transcribed version of the podcast linked above ^^^
In this episode, host Matt Davio discusses how round numbers, dates, and context are all key elements to be a successful trader.
MATT: [00:00:00] Hello I would like to talk to you about the One Minute Trader we are here to take the time strapped trader and turn them into a profitable, money making machine with daily ideas, that give you the trader on the go a reason to trade with risk defined and profits taken when able I’m Matt Davio and this is the One Minute Trader Podcast.
MATT: [00:00:56] All right. Welcome back to the One Minute Trader Podcast. I would like to talk a little bit today about a broader topic that I’d like to call context and context and how to look at markets when to trade and when not to trade and all these things kind of fit together in a nice way if you look at it. But all traders will find over time that there is. Certain days types of days that they will perform better. They will also find that there are certain products that trade better. For example today happens to be a Wednesday as I’m recording this and there are often binary events like a Fed meeting that can move the market and there are weekly events like options expirations that tend to gyrate price and then when I talk about price people tend to like round prices. So for example oil today we’ve got a number coming out EIA every Wednesday at 7:30 here in the West Coast. And is it true that prices tend to gravitate towards even numbers before rotating. Yeah we’re at a point right now where oil is trading at $50. The Dow is trading just to 22,000. And everybody likes to put on their special hats when we hit these numbers. Most of the time traders fade these numbers especially the first time because they often don’t mean much to a trader. So be where as an investor and trader that round numbers although easy to consider math and figure out positions don’t really help you too much when you are looking at how you’re going to behave around the market. So in the same sense when placed in stops I like to place them usually. You know a half percent to a percent over where the masses see them because often stops will be run and then reverse and this happens more often than not. Another thing that happens around context is the beginning of the month. And the end of month positioning along with quarter and along with. Half year and years. So these round numbers are the first of the month tends to be a time when people chase and put on positions whether long or short. So you see a lot of gyrations that are really more reactive and untrue at all these periods than most really want to believe. So keep this in mind when you’re positioning yourself in the markets that round numbers often use the stops are not a good idea. They’re also generally a good idea to target because they like to run prices to these numbers and then reverse because that’s just the way the game works. So, time the time of month. I tend to find Tuesdays through Thursdays the best trading days for me during the week Fridays especially Fridays at the end of the month are dangers because as you get closer to the end of the month prices again tend to get run and stops get run and margin calls get had. And it’s no different. It even brought even prices. And so you really really have to consider context as the all important indicator time and context go together. And this is why I don’t believe you can program so much of the emotion that comes into play around these different contextual moments. I just don’t know how one could program a computer because it’s different every month and you have to kind of be living in it and the market is really an extension of the living organism. So I just wanted to do a short podcast today about don’t use round numbers for your stops stone you know give yourself some some leeway when doing this because it just doesn’t make a lot of sense just because we’re at a price of 22000 that really doesn’t mean anything on a chart. Should not allow you to then behave an act around the market that way. All right. So if you have any questions send them to me again at [email protected] We’d love to ask you your questions we answer them every week for our members. Join us at the five minute trader get a daily video delivered to your mailbox on a timely basis that you can act upon. And as the days go by we will be releasing more of the videos that we did 30 days ago. So if you want to go back on our YouTube channel One Minute Trader.TV that YouTube you can find is there like it’s on iTunes like it’s on Stitcher. Keep listening. Tell your friends. Keep sending the questions. We’re going to keep putting out great content for you and I hope you have a great day. This is Matt signing off from the one minute trader and we hope that your busy life provides you all the happiness and joy that you need for your family. And we hope that we are providing value for you. And if you’d like us join the five minute video delivered to your mailbox every day. Believe me it is a fantastic product that people were just getting great kudos thumbs up and take a look at some of the old videos on YouTube. You’ll see what we’re talking about. Have a great day until next time. I’m Matt at the One Minute Trader and we’ll talk to you soon.
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