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.
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
This is going to be a series on simple swing trading with the objective of capturing swings that have a minimum 3:1 risk-reward. We will take what we have learned about the components of a swing and put it all together into simple swing trading. Swing trading doesn’t have to be complicated and can be quite relaxing. It’s just a solid impulse up showing intent, then a reaction pullback, then the sellers in that pullback getting swapped and showing us a possible new leg up to new highs. This kind of swing trading applies to futures, forex, or stocks in any time frame. In this video, we look at a swing trade in the GBP/USD and SBSW.
It’s easy to get overwhelmed when looking at all the crosscurrents in markets along with all the technical analysis that is out there. Trading does not have to be complicated, it’s a matter of using our tools to see if the buyers or sellers are in control and where that changes. We have several simple ways to map and read markets. In this post, we are going to focus on the simple swap area of a swing and use that as a framework to read and trade markets. The swap area of a swing turning up or down is a significant market structure where the balance of power changes. Learn to see it and then make observations as to how price interacts with that area. Then design ways to read and trade it.
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.