The Market Maker’s Edge

• Ameritrade’s ad pitching online day traders. “I don’t want to just beat the market.  I want to wrestle its scrawny little body to the ground and make it beg for mercy.”This is faulty, ego-based, unrealistic thinking that will lead toward losses, not profits.   The market is never wrong and it cannot be defeated.  It is selfless.  It does not experience feelings of victory or defeat.  The market is a cold battlefield and its participants are engaged in a life-or-death battle against themselves.
• Even when traders have developed a clear-cut definition of a trend, they often disregard their own rules because of their desire to catch the bottom or top of a move.
• Spot a trend with 8MA.  Daily and Intraday down to 15-min chart.  Trade ONLY in the direction of which side of 8MA closing price stays on.  Use reversal signal on shorter-term chart to take profit not initiate trade.
• Spot daily trend with The Opening Price Signal:  Last Price – Opening Price.   The point in time when the signal changes from one side to the other is called the inflection point.   Use inflection point as entry or stop-loss point.