Gain Market Intuition with NinjaTrader’s Market Replay

Back in the ‘90s in Chicago when I just beginning to trade my mentor would say: “I’ve seen this movie before.” Mistaking the market for a math problem, I really didn’t get what he meant – until indeed I too felt a click of recognition as I watched price action unfold. Experience delivers an ability to see patterns that the inexperienced can’t grasp.

Experience breeds not only pattern recognition but the crucial feeling of confidence in the likely outcome of a price duel. When a trader has seen the market try to break through a resistance level and fail two or three times before rocketing upward, it’s easier to tolerate the building of the pattern. In other words, it’s easier to have the patience to hold onto a winner because one has the confidence that indeed, the buyers will soon overtake the sellers.

Most successful traders have years of experience “reading” the rhythm of price action. Speed for example tells you one thing. An incredibly rapid move to the upside might very well be a short squeeze and absent external buying forces, like the whole market or a sector moving up, be relatively short lived. It won’t be this way every time but often the movie of short covering turns out the same way it has for ages.

Which makes the question for traders – how do I see more market movies in a shorter period of time? How do I learn what this year’s top movies are? The NinjaTrader platform and its Market Replay feature answers this dilemma. Think of it as a kind of “Back to the Future” machine for becoming an even better trader.Ninjatrader chart one for blog

A trader can record multiple markets to replay at their convenience. Traders can watch their trading movies over and over and over. At the risk of stating the obvious, this collapses the time one needs to gain invaluable experience.

Traders can also trade – as if the market data was live. It’s like video on demand for practicing trading. You can build trading skill even when the markets are closed or very slow. You can even vary the speed of replay. Watching a particularly volatile move in a slower beat – say half time – can help you learn how the NQ led the SPU until AAPL folded. Eventually you may also want to replay markets going faster than they do. Doing so could help with dealing with the amount of machine generated trading that happens in 2015.

In the interim twenty years since my novice days, neuroeconomics research has shown that market intuition – the ability to predict people – and risk differentiation – the ability to truly know one’s own reaction to price action – are the keys to great trading. Leveraging NinjaTrader’s Market Replay can expedite a trader’s acquisition of both senses.

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