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.
Trade Craft
All Things Concerning the Language of Price
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.
Design Your Own Trading Methods: Part 4
In part 4 of “Design Your Own trading Methods”, we design a couple of setups based on what we have learned in the previous videos about the process of a swing cycle and its components. We will work with a range setup or a wash & rinse setup that has a powerful impulse and is in the pressure cooker zone or the clean air zone of a swing cycle. In the video, I show how to understand and identify the zones and the setups. Any setup needs your full understanding of it, so practice by studying hundreds of them.
Design Your Own Trading Methods: Part 3
Design Your Own trading part 1 was about understanding the swing cycle and its process. Part 2 was learning some definitions and making some distinctions so we can map. In Part 3 we explore the 3 basic ways there are to trade, range trading, breakout trading, and swing trading. When talking about methods or setups, it’s important to approach the subject in an effective manner. No setup works in a vacuum and no setup has statistical probabilities. The only edge you have is your understanding of the market at the time of the setup. This understanding comes from learning the language of price and being able to map your market and the personal experience you develop from this frame of reference.
Truth Dispels Fear – 11/29 Live Session Clip
This is a clip from our Language of Markets Live Session on 11/29/21, while the markets were looking relatively scary. In this piece, I show how to ground ourselves to see what is true in the market structure when emotions are heightened. I also talk about using simple Median Line tools to develop an understanding of the push and pull rhythms of a market.
Design Your Own Trading Methods: Part 2
In Design Your Own Trading Methods: Part 1, we developed an understanding of the different phases of a swing cycle and how it moves in contraction/expansion so we can develop tactics for various parts of the cycle. In this next step, I go over some of the principles of price flow and define the components, and process of a swing so we have an objective frame of reference. With just this step of mapping, you never have to ask anybody what they think about a particular market, you just look for yourself and see what is true.
Design Your Own Trading Methods
This is the first part of a series on how to design your own trading methods. These methods can be from what you have observed in price flow, or they can be methods you have learned and want to adapt to your needs the way you see. It’s beneficial for us to participate in the authorship of the trading methods we use, and to make them ours.
Whatever we design will have to adhere to the principles of price flow. For example, everything moves in contraction/expansion and all market structure is a derivative of gaps and swings. From this observation, we can start to build on solid foundations and come up with numerous methods.
In this video, I want us to get a solid understanding of how price moves in a swing cycle. A swing moves in process and each part of the process has its own components and characteristics. If we understand this, we can design methods and tactics for various parts of that cycle.
Shane
Intuition Comes Unbidden
This comes from our Language of Markets Live session on 8/9/21 where we chose the GBP/USD 20 minute to do a lesson on how to map a market simply and objectively and to start with “what is”. The lesson was about much more than mechanically following objective instructions for a setup. It was about facilitating true learning. The focused, simple, and objective has the effect of relaxing our minds. It’s in this relaxation that intuition and our accumulated experiences become available to us in a way that brings a trade together.
Simple Swing Trading-Part 3
In Simple Swing Trading Part 2, we took our swing and placed it into several contexts. In this video, we learn ways to follow the market with a single CIB (Change In Behavior) line in the pullback phase. We allow price flow to tell us where the buyers or sellers are and when that changes so we can manage risk. This is much different from the nervous experience of trying to predict where a swing should land. One of the things I try to get across in this video is the uncomplicated nature of following (as opposed to leading) price flow.
How To Structure a Trade Plan: WEAT
This is a Clip from one of our Language Of Markets Live Sessions. I show how to structure a trading plan from beginning to end using a daily WEAT chart which is an ETF of the Wheat futures market. Having a plan of the things you can control goes a long way when it comes to your trading consistency and conserving phycological energy. See Foundations Of Trading Part 6 post for more on trade planning. Your trade plans will be unique to your needs but you can use this as a guide.
Basically, know your method and design rules for:
- Entry: Know what gets you in
- Initial stop: know where your stop goes
- Money management: Know your position size and trade management after in trade
- Exit: know what gets you out