Even traders who enjoy success sometimes do not adjust their trading styles as market conditions change ; they find a pattern that usually brings success and they stick with that pattern. During those times when their style is not compatible with the market and they lose , they just shrug and say “those are the breaks” and accept their losses . They have the idea that their technical analysis explained all possibly trade styles, but that is not correct .
If the state of the market can be identified by the trader , that is, the trading currently existing and and the trading expected for the future, their returns can be considerably improved. This is because when congestion trading no one applies the techniques of trend trading .
There are still those times when the state of the market is a bit ambiguous . There wouldn’t be a market if things always were clear , since there would be no difference of opinion between traders , and trading in the same direction would be done by everyone all the time.
One such ambiguous state is when a trend seems to have exhausted its energy and is ready for a turn , and momentum indicators roll and look like they’ll be going from trend to congestion entrance. However, these signals aren’t enough to get in on a large position .
When this occurs pinging can be used . Pinging is an attempt to hedge your bet a bit . A trader places trades of single direction in the direction they expect the market to turn , but they don’t hold them too long , and when lower time period support appears they get out . Pumping action is often manifested by the market at turning points , with comparatively large and volatile swings in both directions as traders of differing opinions around the world take positions against each other . Repeated multiple positions can be taken if a trader is pinging as the market movement goes from support to resistance and then back. Rather than trying to ride the market both ways , and instead of putting a large bet on the direction you anticipate and then holding on , it is as if technical analysis explained to the trader that he could “ping” the market , taking smaller positions only in one direction , and being willing to quickly and early cover when short term support is reached by the price.
Significant profits can be a result of pinging and puts the trader in close contact with the market as the battle between shorts and longs go forward . Traders will be protected from a too early by pinging, even in a confusing market will allow profits to be brought in when attempting to end a trend may fail and the new direction is not certain. Pinging allows traders to get into a position so that when the new trend does settle in and become well established , he or she is already aboard . When seen correctly , technical analysis explained pinging as a method of entering the market when the trader is not yet 100 percent certain about the market’s next direction .

When you are doing a trade the question quickly comes out :  How and when do you leave without losing a cent ?   Aiming targets has to be one of the most important elements of your  trading strategy , and this is the subject of the next article in our series Technical Analysis Explained.

Objects can be found on time (I’ll keep doing the trade for three weeks ) or based on technically (I’ll stay in the trade until my slow moving average passes over my faster moving average)  or  profit-based (I’ll quit when I make the profit of 1000usd   ), or based on price (I’ll stop of the trade when it reaches my target price .)

Of the 3 methods each of them has some advantages and liabilities .  Technical exits are always available and remove this part of private judgment , however work well only in effective trends , cause deficit by congestion , and nearly always leave a number of money upon the table .  Found on time tools are helpful at times but just as often are net losers , and so shouldn’t be seriously taken as a solo tool .   Based on profit exits can train a trader to make frequent earnings but what happens when the trade continues far over your pre-planned exit point ?  This violates the simplest rule of trading: run after you win .

The best means of exiting is to decide aimed prices but only when these are heavily based in the market structure and point the market’s existing support and {resistance matrix}.  If your trade plan {takes into account} the natural support and opposition of the market then your target is going to be sound and the chances of yours of remove everything that the markets has is much more higher then with arbitrarily chosen, fixed-dollar profit targets (which attend to be emotionally driven )  or a technical moving average tool (which by definition is compelled to leave much money on the table ).

How do you aim profit targets according to market structure instead of an arbitrary dollar objectives?  For somebody it is not an easy question however for the trader who has created the understanding of multiple time period structure and the ability to project the support now and resistance levels forward into the future , directing targets is not hard to do . The basic skill is to {use your higher time-period support} and resistance levels ( this should commonly be one time-period higher than your trading time-period), and to set your target at the next logical support or resistance level beyond the current price.

Technical analysis explained as follows: Suppose you are day-trading the S&P E-mini contract.  You’re using a 5 minutes chart and take a position using your best entry tool . The market begins to move in your favor and enhance you have 5 contracts to put on a position you quickly accumulate a profit of 750usd.  You are glad and feel a bit greedy and that makes you want to get profits quickly , especially as you notice a slight retracement in the five minutes chart. But, well known the market structure is all the time at play, you step back for a moment and view the everyday and weekly charts. On your Drummond Geometry charts you can quickly see that your entry was close to everyday and weekly support , at the bottom of the daily envelope and close to the weekly envelope bottom too.  You can see that the logical target of this initial move is at the daily PLDot some 9 full points away, and that the improvement of the 5 minutes bar with its slight retracement is entirely normal and go on with the thought that the market has {further upside}. You set a price objective at the daily resistance and set an alert to sound when it is full filled , so that you are able to take profits here .  You can then further assess if the market will reverse and step back to the beginning support level or pause and keep going to higher level of resistance.

One of the main points is that when watching market structure as opposed to arbitrary dollar value price objectives you always control what the market is doing . As a technical analysis explained course teaches, full control taken by you enhance you know the structural aim at all times as the market moves between its higher time- period support and resistance levels.