Quote from dbphoenix:
The three most important considerations for any trader who seeks to trade price are (1) trend, (2) support and resistance, (3) the imbalances between demand and supply, or buying pressure and selling pressure.
1. In order to determine the trend, one must look back to see where the trend changed and where price lies currently with regard to that trend change, i.e., the context. One may be able to determine this by going back a day or so or he may have to go back months.
2. In order to determine pertinent levels and zones of support and resistance, one must look back to determine where price itself stalled and/or reversed course. This is the message of the market, but one has to listen to it in order to hear it. This also provides context (see the first post to the journal I just started).
3. In order to determine the imbalances between demand and supply and who has the upper hand, one must look at the pace, extent, and duration of buying and selling waves as one applies them against important levels of support and resistance. "Reversals", for example, are nearly always meaningless unless they occur against important support or resistance. If they don't, they are more likely than not to be nothing more than the beginnings of a retracement, and if that retracement does not break the supply/demand line, there's no reason to exit (this is the primary reason why "2Bs" and "123s" and "Ross Hooks" and so forth so often don't work out as advertised).
Judging these imbalances becomes more difficult by several levels of magnitude if one is trying to trade before he has learned to make these judgements with ease. Rather than assessing the imbalances, he's looking for a trade, and if he's trying to learn how to do both at the same time, whatever trade he finds will most likely be the wrong one. It is the trading equivalent of the shortcut that takes many times longer than if one had simply driven the prescribed course that is created to take him to his destination.
If none of this improves your performance to a satisfactory level and you have suspended your trading long enough to become attuned to the behaviors of buyers and sellers by watching price movement without regard to looking for trades, I suggest you either (1) begin following several instruments simultaneously and trading that which appears to be most likely to provide a tradeable opportunity during your upcoming trading session (e.g., it's bouncing off support of some sort) or (2) swingtrade a larger bar interval, such as 60m, which will free you from the one-hour constraint you have and also enable you, generally, to hold your trades overnight.
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