Consistency and discipline with your method are more important than searching for more methods. In How To Practice Part I: I spoke about how our perception of markets gets distorted, and how that affects our skill with markets. No matter how much technical analysis we learn, we will continue to react in the same ways unless our experience of markets changes. The way we begin to change how we think about and see markets can be done through a practice of consistency and discipline. In this video, I show a practice of doing a series of trades the exact same way every time regardless of the result or how we feel. That means knowing ahead of time how we and where we enter, where we put a stop, how we manage the trade, and where we exit. Doing things in a focused and consistent manner will bring personal insight into markets and about yourself.
Practice Exercise
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 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.