Future trading is where you hold a position for 1-3 days and capitalize on cyclical swings in buying and selling behavior.
Master Morning gaps
Use multi-time frame Fibonacci retracements to locate turning points
Watch the market clock
New high generate greed carrying prices higher
Use math-based indicators to verify the price pattern
Buy at support and sell at resistence
Strong price movement pairs disciplined momentum strategy with preferred swing trading.
The swing trader checks the 60-minute chart for support-resistance but uses the 1-minute chart to time execution of the short-term flow of the market
Market insiders use the volatility of first-hour executions to fade clean trends and empty pockets
Time should activate exits on nonperforming trades
Decide how many bars must pass before a trade will be abandoned, regardless of gain or loss
Volume leader predicts price change. Volume reflects latent energy that releases itself through trend
Expect to stand aside, wait, and watch when the markets offer nothing to do
Constricting price bars, lowering volatility and range placement signal the end of one swing and the beginning of a new impulse
Oscillators measure this important guage through overbought-oversold polarity
Price acts differently at tops and bottoms
Breakouts and breakdowns attract many participants but require precise timeing to turn a profit
The highest profitability will come when entering a position at the end of a low-volatility period (contracting bar) and exiting on a volatility peak (expanding bar) just as the trend pulls back
Technical Analysis teaches traders to execute positions based on numbers, time and volume
As volume cranks up at 3:00pm don't expect anyone to change the channel
Big volume kills moves
The Commodity Channel Index (CCI) is a timing tool that works best with seasonal or cyclical contracts
RSI indicator is supposed to track price momentum
Sixty percent or more of total daily participation occurs during the first and last hours
Spend more time controlling losses than seeking gains
Every good analysis should validate current conditions through both forward (strength) oscillators and backward (momentum) indicators
Popular oscillating tools, such as RSI and Stochastics, identify overbought-oversold markets. Moving averages and MACD look back and measure momentum change. Or swing traders can just draw simple trendlines and channels in all time frames and use those instead as primary momentum tools
The lack of a simple linear relationship between volume and price change frustrates attempts to make accurate predictions
Don't fall into the complexity trap
The language and terminology used by the author adds greatly to the comprehension of the material. And there is an EXCELLENT glossary in the back of the book. I've also noticed that his terms are not grabbed out of "thin air". Most of these concepts originated in excellent studies on the futures markets done over the past 20 years. For example, "negative vs positive feedback" comes from research done by Raschke and others in the early 1990s. Farley just does a much better job explaining the complex ideas to the average trader, and telling them how to take swing trading positions based on their power.
This book is very original and not part of the cookie cutter garbage that passed for a "trading book" before the bear market started. It's SO appropriate that MST showed up just as tougher days hit the stock market. Farley's book offers a very effective way to deal with these choppy markets. And he does a fabulous job getting the message across. Reading the book does not take an advanced college degree. But it does require a commitment by the reader and a willingness to learn something new.
Highly recommended!
Farley is not for beginners by any means. And he has to be read carefully to be understood. But this is a a very, very good book - probably one of the best. There are many pages of in-depth strategies. Yes, the book should be written more clearly but reading it is absolutely worth your time.
I heard Farley in an interview state he purposely challenged traders by starting the book with topics that confused and frustrated them the most. He also said he left the noise level "high" in the charts because that was the real world that traders had to trade.
As for the one star ratings - I cannot understand how much they missed the brilliant content. Definitely not for everyone.