Shane Blankenship

What Is Flowing With The Market?

by

We have all heard that it is a good idea to go with the flow of the market but what does that look like? It’s not enough to just read about flowing with the market, it must be practiced and experienced. We must acquire the skill of following markets up and down through its changes seamlessly.

A disciplined trading plan will have an objective method and will objectively define entry, stop, and management. Part of any good method is never wondering if the market is going up or down or about to turn, It’s doing what it’s doing. You want to independently know this information without having to check outside sources.

In the video, I show a simple way to practice using a 100-period moving average, but you can use anything you want as long as it is objective and follows the market. This is a letting go practice, a learning to change with change.

We have all heard that it is a good idea to go with the flow of the market but what does that look like? It’s not enough to just read about flowing with the market, it must be practiced and experienced. We must acquire the skill of following markets up and down through its changes seamlessly.

A disciplined trading plan will have an objective method and will objectively define entry, stop, and management. Part of any good method is never wondering if the market is going up or down or about to turn, It’s doing what it’s doing. You want to independently know this information without having to check outside sources.

In the video, I show a simple way to practice using a 100-period moving average, but you can use anything you want as long as it is objective and follows the market. With just a few rules we can use, the moving average to tell us if the market is up and we are looking for longs, if the market is down and we are looking for shorts, or if it’s neutral and we are neutral. This is a letting go practice, a learning to change with change.

Organized Volatility: More One-Line Practice

by

In this video, I follow up on the trend line exercise I introduced in the last post. The exercise is designed so that you can learn about markets and price flow in your own experience. There is beauty and harmony in each chart that shows the footprints of the buyers and sellers.

To most people, the price action on a chart looks chaotic. It’s not chaotic, you need to learn how to look, and how to see. This is the beginning of designing a structured method for trading and it starts with some openness and curiosity.

This trend line practice isolates 2 confirmed swings with the same size reaction legs. By identifying two same-sized swings, we have found some organized volatility and behavior. We can then participate in that continued behavior or have a way to know when it changes.

Shane

One-Line Practice: Set Yourself Aside And Follow

by

In this video, I set up a trading plan and introduce a trend line exercise you can practice in any market and in any time frame. There is no one right way to draw a trend line, it’s a matter of function and what you are trying to see. We will be drawing a trend line off two relative (same size swings). This will identify the footprints of organized volatility on a chart.

This exercise is designed so that you can learn about markets and price flow in your own experience. Its objectives are:

  1. Learn to isolate relative market structures.
  2. Learn to set yourself aside and follow price no matter what price is doing.
  3. Allow the practice and price flow to teach you.

We first need to make some objective swing definitions:

  • Confirmed Swing High/Low: A new high confirms a swing low and a new low confirms a swing high.
  • Balanced/Relative Swing: Same size reaction legs.

One Line Practice Instructions:

  1. Identify two confirmed relative swings
  2. Anchor a trend line at the two lows and make observations (not expectations) about how price interacts with the line.
  3. Always follow the last two relative confirmed swings with the trend line.
  4. Draw a box across the top of each swing and observe how price interacts with the boxes.

By identifying two same-sized swings that confirmed new highs, we have found some organized volatility and behavior. We can then participate in that continued behavior or have a way to know when it changes.

Shane

Trading Rules Are Not a Suggestion or an Option

by

When you make a trading rule, it’s not a suggestion or an option. Mostly, when we want to be flexible with our rules, it’s an emotional impulse pulling us to make some unbalanced trading decision. Make sure to keep closing every escape route you have. If you are not ready to commit to rules then don’t make them, you will just be setting yourself up. Wait until you are ready, then have a go at it.

In my posts, I have been doing an exercise of trade planning for 30 trades. This is a complete plan covering every aspect of the trade. Today I will do a review of the trades done so far.

Components of a Trade Plan:

  1. Objective method
  2. Trade entry, stop, and exit
  3. Position sizing and risk management
  4. Documentation and review

The review is simple, I ask 2 basic questions.

  1. Did I make a clear plan ahead of time?
  2. Did I follow that plan?

These questions demand honest, yes-or-no answers. They force me to confront my trading discipline head-on, without room for excuses or escape. At first, the rules may seem confining, but after a while, you will see that trading can be very relaxed.

I understand that rules for every aspect can be overwhelming. You can do it in steps tackling one thing at a time. For instance, you can work on only entries, stops, or management until you master that one thing. Setting the foundations of discipline and consistency won’t offer immediate gratification but it will serve you in the long run. What’s important is that you keep moving forward toward your objectives with awareness.

Shane

The Wash and Rinse To See True Support/Resistance

by

True support and resistance are found in the meat of the move, not at the extreme highs and lows. To find it, simply draw a zone or box, look for the place that price touches the most, and then pay attention to what happens afterward.

In this lesson, I show how a Wash and Rinse structure at the pivot of a swing uses the most touches to find true support in a market.

The Wash and Rinse has a process that we can follow in real time.

1. Multi-Pivot Line (MPL)
2. Zoom through the MPL
3. Come back and retest the MPL
4. Zoom back through the MPL the other way

What happens in this process, is that buyers are holding some level. Price then busts that level triggering stops and at the same time encouraging shorts to enter. Then the price rips back up essentially cleaning the book of orders and showing where the true support is (at least for the time being).

Once you recognize this structure, you can begin making your own observations and use these levels to read a market or build a setup around it. The most important part is to learn to design a plan with objective rules around what you observe.

Shane