What is the best way to day trade?
I believe that the best way to approach the market every day and walk away with profit, is to trade an approach that I call Intuitive Market Presence (IMP).
This is the Present Trader. My name is P.T.
IMP is the result of many years of trying, learning, adjusting, improving, and perfecting on the futures markets.
How I Got Here
After taking some initial cowboy trades and record size losses, I started out my trading career as a trend trader. I realised that if I had just stuck to the prevailing trend on my large losing days, I would have made money instead of losing money.
So, I started working on an approach that identified the trend early, stuck with it for as long as it ran, but also had clearly defined market conditions for turning around when it was time.
In those years — 2012 to 2017 — I was mainly trading the South African 40 Stock Index Futures. The South African stock market is commodity rich, and intraday trends are quite common. So, my approach worked well and I taught it to many fellow South African traders.
I went through a bit of a dark night of the soul near the start of 2018, when I lost a dear loved one, and decided to walk away from trading and trader coaching.
A few years later, when I was over my depression and felt ready, I returned to trading. But now, I was trading the ES and NQ futures of the US stock market indices. And I soon realised that these markets were not such strong trending markets as the South African stock market.
I needed to find a new approach — fast — and thankfully saw some material about price action trading. I started learning voraciously and I was blown away by the common sense behind the price action theory. Why did I not explore this field earlier? Granted, the practical side of it was a little unclear still, but the theory made awesome sense.
And so I started trading it. It went a little rough at first, but soon I grasped what I needed to do.
Price Alignment: Price Action Simplified
My price alignment approach was born. Price alignment is price action simplified. It is the practice of identifying the prevailing market mood right now, at this moment — what I also refer to as ‘market presence’ — and then trading accordingly.
There are four main market moods as taught by price action:
- Breakouts (or strong trends)
- Tight trend channels
- Wide trend channels
- Trading ranges
If you can identify which market mood is currently in play, and you can do so fast, you can then get in sync — or aligned — with that market mood and trade accordingly. Intuition is important here. You are taking responsibility, and making a hard call: is the price action that I am observing right now trending or ranging price action? We will turn to intuition in a moment.
The Three Trading Hacks
But the main differentiator of price alignment is what you do once you have identified the prevailing market mood. I developed three trading hacks to deal well with each of the market moods. There are three hacks rather than four, because one of them covers two closely related moods, as you will see.
- Trend Tracker — deals with breakouts and tight trend channels
- Channel Slider — deals with wide trend channels
- Range Scalper — deals with trading ranges
These are very precise methodologies for exactly how to trade in each of the market moods.
We will go into detail on how these hacks work in future lessons, but for now I can say that Trend Tracker gets into a trend trade very soon after the market opens, if the conditions indicate trending price action.
It takes a little longer for a wide trend channel or a trading range to confirm, but once they do, I switch my approach to the appropriate hack. For channels, I get into a trade in the direction of a trend on a pullback under certain conditions, and stay in at least until I reach a new extreme in that direction.
In trading ranges, I scalp both up and down as the price action ping-pongs between areas of support and resistance.
For both Channel Slider and Range Scalper I have set chart drawings that I set up and use to assist my trading, and when we get to those articles and videos, I will teach you these drawings and how to add them to your charts.
I have used the Price Alignment concept, and the three trading hacks, to develop many different trading strategies. In these strategies, I have covered every time frame from the 30 second chart to the daily chart, and both futures and CFDs (including forex, gold, and oil). I have always been keen on having set trading guidelines as this helps me focus while trading. Using the speed at which the market moves as a variable input into these strategies is a safe practice.
The Intuitive Market Presence Edge
My current focus is what I call the Intuitive Market Presence Edge, or IMP Edge. It is a trading approach that uses the 5 minute chart of the morning session of the ES futures market to trade. I refer to morning session quite loosely, since intuition on the day decides the length of the session. It starts at the US market open at 9:30 Eastern (or after data, if any), and trades to one of 11:00, 12:00, or 13:00.
Where Presence Fits In
Okay, so we have spoken about the market, and we touched on presence. As you know by now, this website and its YouTube channel has two broad categories of Presence and Trading. This is a trading article, so I won’t go deeply into presence here.
However, you need to know that for Intuitive Market Presence, the presence term in the name refers mainly to being in the moment, and seeing what the market is doing right now. If you try to trade trends in a ranging market, you will get badly hurt. The same applies to going short in an uptrend channel, for example.
Of course, as with all other mentions of presence on this website or my YouTube channel, presence also refers to the choice to prioritise your state of consciousness in your life. That prioritisation is what makes all the difference. But yes, we will talk about that more in the presence content.
On Intuition
Now, let’s talk about intuition.
Many traders try to trade intuitively, then see that they can’t be trusted to make good decisions in live market conditions, and then try to find a rule-based or discretionary trading strategy or system.
The problem with finding and using a trading system with set rules is that the market is organic. It can do anything at any time. And if you have ever ventured into algorithmic trading and computerised backtesting — I have spent thousands of hours on this — it can be mind-blowing how well an approach can work this month, and then how terribly that same approach does the next month, or the next few months.
So, one has to use intuition, and your guidelines — rather than hard rules — need to be flexible enough to allow for all market conditions. As mentioned earlier, it also helps using market volatility to tighten or loosen certain parameters of the trading approach.
Obviously, presence breeds intuition. The more time you spend looking at charts from an open, relaxed, pliable state of consciousness, the more you will learn to see the rhythm of the market. The more you can quieten the mind, the more you will be aware enough to pick up the subtle cues of price and what other (institutional) traders are doing in the moment.
When you spend enough time watching the market, studying price action, and trading, you develop an ability to read what is going on. You get a feel for whether a market is trending or ranging. This is intuition.
You also know whether it is best to continue trading or to take your profits after a certain point in time. This is intuition.
Study Al Brooks
I always recommend that traders study the teachings of Al Brooks. Al Brooks is considered by many as the father of price action. His teachings are a little bland and boring when compared to what traders are doing on YouTube and other social media nowadays, but they contain pure trading gold. And spending serious time in Al Brooks’ courses and books will strongly support any attempt to develop deep trading intuition. It will allow you to read the market and see what is happening as it is happening.
Of course, my content here will also allow you to learn how to read the market. I have a much simpler approach, derived from a more exhaustive body of price action knowledge. So I might not be a perfect fit for every trader.
Join Me
You can enter your email address below to receive the trade record and guidelines of the Intuitive Market Presence Edge. You will also be able to join the Present Trader Discord server and follow along as we discuss the trades the approach gives us every day.
These resources are available to you free of charge.
I aim to make all the money I need through trading, so I do not charge traders for access to my approach or community. If I ever offered coaching again, that would be a different story, as I put in a lot of personal time into coaching clients. However, I’m not sure I’ll ever coach traders again.
But don’t despair. I’ll still give you all the help you need through my writing and videos, free of charge.
That concludes the second article. Thank you for reading. I’ll see you in the next one.
P.T.