I am a short time frame" Discretionary Trader." I trade for income and not for capital appreciation and I am trying to earn my daily bread from the market.
Like "System Traders", I cannot bet on the probabilistic nature of a system and can’t afford draw down while waiting for the probability to work in my favor. My goal is to manage the day’s opportunities as good as I can. My edge is minor demand and supply imbalances that occurs in the market frequently and give a 15-20 point move within the next 15 minutes. These moves could be just “NOISE” for many.
My trading revolves around Decision Points. Entries must happen at these levels where a demand and supply imbalance existed earlier. These are proven price levels and I expect the imbalance to be there again. My entry is mainly based on my “read” of the market and my “feel” for the price action at these Decision Points.
I always decide upon my exit before I enter the trade. When the price approaches and reacts to a Decision Point, I identify a point where price should not go if my expectation is correct. I will try to enter as close to this point as possible. Risk is reduced by making my entry close to the stop and not by placing the stop close to the entry.
In my scheme, unlike in the dictionary, “Exit” comes before “Entry”