In the previous post “Gap On The Left”, we looked at a simple, relaxed way to read and follow markets. In this post, were going to combine that with relative swings and follow price down into the gap on the left and let it tell us when it wants to turn back up. So often as traders, we ignore “what is” occurring in favor of what we think or want to occur. You can reference the post “One-Line Practice For Personal Insight” for practice in following swings.
Trade Craft
All Things Concerning the Language of Price
The Gap on the Left
In this video, I will show you a simple visual way to read the flow of the market. Big Gaps are easy to see on the chart, our eye naturally gets drawn to them. A gap is a quick supply-demand imbalance that pushes all the guessing traders (contraction) into or out of their positions (expansion). Use this simple framework to make observations then create your own ways to trade it using those observations.
Following Live: Theory Into Practice. October 2020
This month we’re going to follow the E-mini S&P and Aussie 240 minute swings. Last month saw a big jump in volatility as we followed silver and the Swiss currency. We learned a lot from these charts as bigger swings carved themselves out and the USD/CHF did a transition from down to up. It’s good to see these transitions take place live as you follow and learn to change with change.
Beginners Mind
What if there were no books or any instruction anywhere on how to trade and you figure it out by just observing and discovering? You would begin to trade based on your fresh observations, trying this and trying that, until you found your way, getting more efficient at it as you went, like a child learning to walk. If you did this, you would be learning from the price itself as it flowed, from a place of discovery and not-knowing. In our live Language of Markets session, we did an exercise where we took an active Emini-S&P market and learned as we went. I did this video later that afternoon to demonstrate how that exercise led me to my own beginner’s mind.
How Swings Grow Up and Expand
In these blogs, we have done a lot of work on mapping markets with swings. In this post, we will look at how minor swings grow up to be major swings and ways we can read and trade this dynamic. These will fall under the category of type 2 trades, expand then continue. Its a type of waiting outside the immediate price action that can be very relaxing. You can read about “The 3 Types of Trades” options on the Language of Markets home page.
Finding The True Levels In the E-Mini S&P
To find the true structured support and resistance levels in a market, we use a contraction of price and a wash of that contraction. You can see these true levels on this 20 minute E-Mini S&P chart I posted for our members. In the video, I describe the steps to the process of a wash and rinse structure as a pivot component of a swing and how that can help us to read the true supply/demand levels.
Crashing Expectations
This is a live clip from the Aug 3rd Language of Markets Live session where we discuss how approaching any method, structure, or trade with predetermined expectations blinds us. It’s a valuable thing to eventually have our expectations disappoint us. We are forced to give up and this frees us to see the whole picture. I then demonstrate how to discover the essence of swings by discovering controlling buyers and sellers in the live AUD/USD. I also give an example of how reading price action (bar-by-bar) easily shows us the controlling buyers and sellers that showed the swing to project for an entry.
Following Live: Theory Into Practice. July- August 2020
In reviewing the USD/CAD and the E-Mini Russel we learned that markets can go sideways for a while not swinging much. I also introduce a percentage measure to test out how far price might go past a balanced swing and confirm a change. This month we will follow Silver futures and CHF/USD. Mapping swings is a simple way to frame and understand any market. One of the lessons I touch on is a video about approaching mapping swings or any method without expectations to get the most out of it.
Two Trades, Same Process, and Essence
I show two trades in this video, one by me in the USD/CAD 20 minute and one by a student in the E-mini S&P 2 minute. Both look a bit different but have the same understanding that comes from learning about the process of market structure and the essence of each structure. Sustained trading is not about pattern recognition, its a personal understanding of the whole read and structure that develops from practice. In the video, I show how you can see the structure no matter what time frame it shows up in or its shape. You can see this same structure and understanding in a post I did a year ago, “Trading The Valley In The CAD”.
One-Line Practice For Personal Insight
In our live sessions, we spent much of the month learning to read and trade with just one line. We can anchor this line consistently on various components of the swings that we structure and then use it to learn. This is one of our simple practices that will enable your own personal learning and insight into how markets move. True learning must come from intuitive comprehension. Approach the practice with curiosity and discovery and leave expectations behind.