Trade Planning: Learning Through Consistency and Discipline

I’m going to do a series of posts focused on trade planning, aiming to learn about consistency and discipline through practice. In this exercise, I will consistently plan, execute the planned trades, and document a total of 30 trades.

A trade plan is an essential tool for any trader. It consists of a method, trade management, position sizing, documentation, and review. The plan should clearly state, ahead of time, the specifics of each trade: where to enter, where to place the stop, how the trade will be managed, where to exit, and how to size the position. This level of accountability and responsibility offers a stark contrast to our usual approach, which often relies on ineffective emotional impulses for making trade decisions. It enables us to make informed choices instead.

In future posts, I will delve deeper into each aspect of the trading plan, discussing its importance and how to effectively implement it. However, it’s important to note that this exercise is not about the method, a setup, picking the right stocks, being right, winning, losing, or predicting markets. The focus here is not on the outcomes of the trades. It doesn’t matter if all the trades result in losses. The purpose is to learn about consistency and discipline through your own personal insight.

It’s through discipline and consistency that we begin to rewire old, ineffective habits and develop an effective mindset for trading in the markets. Consistently following a plan also provides a baseline that allows for meaningful comparison and learning. There is often resistance to this kind of structured approach. If you’re interested in adopting these guidelines, I encourage you to step into it as much as you’re ready for and make it your own.

This series is not meant for you to follow my trades or worry about my method or setup. It’s not important – my setups lose most of the time anyway. Use your own method; there are plenty out there. Focus on making it as simple and objective as possible. I also suggest starting out with simulation trading or using a very small size.

Clip From Live Session: It’s All About Price, Not You

This is a clip for one of our Live Language of Markets sessions. It was an active day in the markets, so I used the opportunity to demonstrate and ground teachings in an S&P E-Mini market. I walk us through the process of calmly following and trading a market. I show that with an understanding of market structure, we can easily and quickly acclimate ourselves to any market. From there, we can follow the unfolding process of price flow smoothly, changing from long to short back and forth. We do this by making it all about price and what it wants instead of all about us and what we want. The next step is to trade when appropriate with discipline and consistency accepting stops and wins. We know ahead of time, what gets us in, how we will manage the trade, and how we will exit with 5:1 R/R.

How To Practice Part I: Learning to Change With Change

This series is taken from portions of the “How To Practice” course I am currently building for Language of Markets and is designed to shift how you perceive or experience markets. Our actions are always dictated by how we experience what is occurring. This is how we can know a lot about markets and trading but remain inconsistent with our actual results. Unless we change how we perceive markets, we will always react in the same way no matter how much we learn about the technical aspects of markets.

This Video is a simple exercise in the S&P 500 and is about not-knowing and learning to change with change. The market just does what it does, there is no reason, it’s just happening and we just follow it. The market is not good, bad, right or wrong, fair or unfair. Developing this kind of experience in the market takes the emotional charge out of needing to know what is going to happen, and needing to be right or avoid being wrong. Your perception of markets will begin to make a shift to perceiving what is actually happening, rather than fear-based projections of what’s happening, enabling more intelligent and consistent actions.

Discipline and Consistency in Trading

By changing the structure of our mental environment, we change how we experience markets, trading, and loss. Through discipline and consistency, we can wear through the ingrained habits that affect our trading results. You may have learned and know a lot about the technical side of markets, but you may still, end up with inconsistent results in your actual trading over and over. We need both technical knowledge and the ability to execute that knowledge consistently.

How and When to Buy a Deep Market Correction, Part II:

In How and When To Buy a Deep Market Correction Part I. I showed a simple and objective balanced swing technique to find a Change in Behavior (CIB) in the deep pullback. In this lesson, we ground the teaching by doing step-by-step practice in stocks, currencies, futures, and Bitcoin. We finish with lining up live examples in some weekly stocks.
Practicing this simple technique will teach you to follow a deep pullback rather than trying to predict it. Make your own observations and discoveries about ways Change In Behavior can be applied.

How and When to Buy a Deep Market Correction, Part I

I use this technique for any deep pullback in any market and especially when the stock market has gone into a recession. It allows me to follow and wait patiently to take part in the next growth cycle while everybody else speculates about nonsense.

When a market is in the process of doing a deep and prolonged pullback, we need some simple and objective techniques to show us when the market is turning back up so that we stay out of bottom-picking trouble. We want to be able to follow a deep market correction patiently through its change, so we are going to use the principle of Change In Behavior (CIB). We will use 2 confirmed balance swings in a deep pullback as our Continued Behavior so that we can determine when price flow has a Change in Behavior. This allows us to wait patiently for volatility to organize itself and show us what needs to change for the deep pullback to be over.

Seeing In Swings

We want to learn to see and experience the market in swings. This gives us a clean and consistent look without all the baggage we add to markets. Swings have a process and components that make up that process. These are the building blocks we used to design methods and setups that will become part of a consistent trading plan. In this video, I teach you how to map any market with swings and to identify the process and components that make up the swing. This is foundational and is always our first step when looking at a market.

Method, Money Management, Mindset

Applying both a reliable method and money management strategy (that fits with that method) in a consistent manner will set you up for the proper mindset to execute that method in the first place. The mindset that is most effective is a relaxed mind. One of the biggest mistakes we make as traders is to think that there is something wrong with us when we keep making emotionally driven trading decisions that get us into trouble. Much of that is due to having no structure from which to make trading decisions, using predictive methods that rely on hope and belief, or thinking we should be able to jump in or out at every turn. In this video, I try to get across how method, money management, and mindset come together for me when I’m doing it all properly.

What Is A Trading Setup?

A trading setup is a set of conditions that come together in a particular way, indicating a probability of one thing happening over another. It’s like a weather event that happens when certain conditions come together in the atmosphere. First, we must define the conditions within price flow so that we can recognize them coming together and follow their process. The conditions we will use will be 2 of the market structure components that make up a swing. In this video, you will learn about the gap impulse and the shelf and how we can lean on it after certain conditions are met.