Market generated information

The market auction has broadly three categories of market generated information: 1. Market Structure, 2. Time & 3. Trade Logic.

JD has perfectly summarized that – “Logic creates the impetus, Time generates the signal, and Structure provides the confirmation”. JD says that an expert trader is the one who relies more on his trade logic to think of a trade idea; later use time component for making entry or exit decisions and uses market structure for monitoring the trade. But not all these three categories of information are easy to comprehend or assimilate for a beginner; so as a learner we have to start with the easiest i.e., market structure. Studying market structure & practicing it while actively trading the markets, help us to understand the remaining two categories through immersive learning. I ask you to take a minute to think about the noise surrounding you, which says trading is easy! Now ask yourself- Is it?

Each of the market generated information can be called as data points; & such data points have its own odds associated with it. When two or more data points speaks similar story, they are called confluent data points; and it is very important to note that such a confluence has exponential impact on the odds of something happening in the market & not the geometric one! Some of the data points from a day’s market auction may have an impact on future auction, & hence such an information must be carried forward. Importance of carrying forward data points is that, market always takes care of current business first, then only it can show some signs of change in the market activity. As a trader we must be able to identify the change occurring in the auction earlier than our competition, so as to capitalize on a given opportunity; & one must not fight with the change & trade against it.