A Good Practice Destroys Itself
We take on a discipline to do something we don’t naturally do or want to do. We set some rules that will be uncomfortable and ride out the restless energy.
Keep in mind that a good practice destroys itself, the whole point of a discipline is to get to the point where we don’t need the discipline anymore. That is called transformation and it takes time.
By being consistent with discipline over time, the reactionary impulses begin to die down and you will find yourself more balanced. This is where true intuition can begin to show up.
At some point, you might see where one of your strict rules doesn’t make sense for a trade and if you come from a balanced mindset, you can make a commonsense decision about it.
This kind of thing is testable if you have an objective method. You test your intuitive results against the objective method results. This is all a one-step forward, 2 step back kind of thing and takes time to develop. If you’re in a rush, this tells you you’re not balanced and need to keep the steady discipline.
Shane
What Is Flowing With The Market?
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
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
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:
- Learn to isolate relative market structures.
- Learn to set yourself aside and follow price no matter what price is doing.
- 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:
- Identify two confirmed relative swings
- Anchor a trend line at the two lows and make observations (not expectations) about how price interacts with the line.
- Always follow the last two relative confirmed swings with the trend line.
- 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