Swing Trading

Trade Planning: Learning Through Consistency and Discipline

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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.

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

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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.

Design Your Own Trading Methods: Part 3

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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.

Simple Swing Trading-Part 3

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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.

Structuring A Trade Plan

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In recent live sessions, we have been going over how and why to structure a trade plan so that we are not making ineffective emotional decisions on the fly while under pressure. In this video, I demonstrate making a precise trade plan on SAP. Use this example as a guide to designing your own trade plan where you:

Know our method and design precise 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