Everyone wants to be right, no one wants to be wrong when it comes to day trading. Traders love to brag about how right they were. Yep, they do! We hear it all the time from even the most experienced traders in the world.
The reason we probably hear it is that NO ONE knows 100% which way the market is going to go. So, to be right, means something in the world of the unknown.
Let's get back to why buy red and sell green? It is about getting Pillar #2 of trading success completed and that is to get a good fill price to set up Pillar #3, a good exit price. Without a good fill price, getting a good exit price is not as easy as it sounds if you wish to make consistent money day trading.
When we trade, we normally send out orders 4 to 20 ticks away to enter. Meaning, that if they orders get filled, they would have to be green sells and red buys just based on the fact we are reaching (Fishing) for good fill prices.
As I suggested, NO ONE knows if the market will make it 4 to 20 ticks away from the current price, but if it does, then we just got a much better fill price than if we just got into the market at the current price. Now, we have a price advantage of others at that fill price moment.
Note: This is important. Lets suggest we got filled 12 ticks better in the ES, (3 points). That is a lot of energy to go 3 points on average. Do you think the market may retrace 3 to 6 ticks from that point? We it should set back on our opinion. This is part of our secrete sauce. We wait for the market to make a move up for example, then..... we place limit orders above the market to sell. Then we do the same for buys and one of these orders will most likely get filled. Then we exit 3 to 8 ticks better and then do it all over again and again, and again.
Buy red means exactly that, we look to enter long when the current bar is below it's opener, showing red. Similar to a RBBS Buy Sell entry model.
Past performance is not necessarily indicative of future results.
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Futures, Options on Futures and Forex trading involves a substantial degree of risk of loss and is not suitable for all individuals. An investor could lose the entire investment or, in some cases, more than the initial investment. Past performance is not necessarily indicative of future results.