Trading During All Time Highs

Lately traders have been faced with a new type of market, one that continues to move up even though many believe price is over extended.


This can present a new type of issue for traders who have never had to trade a market that has been stuck at all time highs for an extended period of time or never traded a market that keeps making new all time highs.

Not to mention a market that is operating on below average volume, this week we are going to look at a few items that could help when trading at all time highs.


The best rule of thumb we use at Gorilla Futures is to simply follow the trend as close as possible. As day traders we are in a unique position as we really shouldn't care where the market is moving just that the market is actually moving.


Day traders need a certain amount of movement to get in an out or trades throughout the day, this could be bearish/bullish movement but as long as price is moving traders could potently take trades. Once price does get moving we like to stick with the overall trend. This means we use a top down approach and try to line up as many time frames as possible in our favor.


By lining up time frames traders are able to see what the overall direction is and look to capitalize on these movements. Once we know the direction, in this case very bullish we can then look to take trades.


Now even though price is at all time highs it doesn't mean that one it cant go higher or move back down to a more cost effective price. Bit until the later starts to happen we like to follow the over all trend.


Now you might be asking your self how do we know when price is making a correction? The best way is to rely on price action and look for signs that the direction is changing. This change normally comes in the form of a lower low and lower high when price is transitioning from a bullish trend to a bearish trend.


This is one of the best signs to know when price is starting to take a down turn or correction.


As a trader we do not want to make assumptions or guesses that the trend has change instead we wait for confirmation that the trend has change.


In short we at Gorilla Futures look to take longs as long as the price action is signaling bullish market structure. There will be corrections and pull back along the way but this is when we rely on our price action and higher time frame analysis to determine what the current trend is.


Day trading at all time highs may be difficult but by using price action traders should be able to determine what the current market structure is and make it work in there favor.


Do you enjoy trading at all time highs? Comment down below.



1 comment