TradersLibrary2 - anatomy of a volume profile trader

time to go through your checklist.
Checklist
The checklist should be similar to that of an instrument rated pilot. When flying
an aircraft at night or through thick clouds you can’t rely on your senses as they
can be easily disoriented in such situations. Instead, you would rely on your
instruments to guide you. Those instruments are the indicators you choose to
use. I personally only rely on leading indicators such as volume, anything else is
a derivative of price and is therefore lagging. A volume imbalance is what causes
price to actually move, therefore it is leading price.
My checklist involves the following:
A. Timing
Will the trade move in my direction within 3 days?
B. Risk to Reward
Is there sufficient room for the trade to develop, or is it already extended and
likely to retrace?
C. Economic and Geopolitical Events
Is the market awaiting new information, or is there an event that could make the
trade no longer valid?
D. Are the higher up timeframes in alignment with my directional bias? Are
they in consolidation or trend? This will have a direct affect on the quality of the
trend.
Failsafe
A failsafe mechanism is designed to activate when all goes wrong. The purpose
is to limit damages and return to a safe condition.
My failsafe is to flatten positions immediately. This can be done by desktop,
laptop, cellphone or a phone call to a broker. I have my broker's number written
down and also have cell phone numbers for the trade desk staff. I also have
multiple accounts in the event I need to hedge an order that is stuck in system.