I have said it over and over again, that short term trading is all about catching the price oscillations (waves) at the earliest possible moment – particularly on the days that the “surf is not really up”.

When you are going to ride a wave with a small amplitude, you need to get in at the earliest possible point – preferably within a single tick of the actual turning point. This can only be done when you are pretty sure where that turning point will be.

Figure 1

The chart shown in Figure 1, displaying the 10 year US Bond Futures market, was configured with the horizontal lines (SRVs) Sunday Afternoon, December 1, 2013.

Note that the four SRVs (horizontal lines) – from the one at the top of the chart, with a value of 124’16.0, to the lowest one at 124’16.0 – are separated by 12 ticks.

We only risk 4 ticks in this market – so 8 ticks is a minimum potential trade. With twelve ticks as the average oscillation we must only give away a maximum of 4 ticks – average 2 on each end of the trade.

If you can come up with a better way to identify such trading opportunities other than that using my SRVs, I would love to hear about it.

Otherwise, a savvy short term trader should try my SRV method, right?

 

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