How to Trade Flashcards
Most Important Rule in the Markets - PRICE IS TRUTH
Low probability events trap traders into thinking the is doing something it cannot do
Their denial costs them money because the market is creating a Pain Trade.
Sometimes the Low Probability event takes place and you have to go with it as you have to trade what you see
TRADE WHAT YOU SEE AND NOT WHAT YOU HOPE TO SEE OR EXPECT TO SEE
Most Important Rule in the Markets - PRICE IS TRUTH
Low probability events trap traders into thinking the is doing something it cannot do
Their denial costs them money because the market is creating a Pain Trade.
Sometimes the Low Probability event takes place and you have to go with it as you have to trade what you see
TRADE WHAT YOU SEE AND NOT WHAT YOU HOPE TO SEE OR EXPECT TO SEE
When Looking at the Chart I must classify the cycle it is in to determine what it can do based upon what I see
In a Bull Market in each of these cycles only look to do the following
Bull BO = Strong Momentum; Buy any time, for any reason, Hold for a Swing
Tight Bull Channel = Only Buy, especially a PB, take partial profits at a new high
Broad Bull Channel = Mostly Buy, but can Sell, Scalp more, swing less. Use Limit Orders, and scale in more
TR = Traders want VALUE; BLSHS. DO NOT believe moves will go far
When Looking at the Chart I must classify the cycle it is in to determine what it can do based upon what I see
In a Bull Market in each of these cycles only look to do the following
Bull BO = Strong Momentum; Buy any time, for any reason, Hold for a Swing
Tight Bull Channel = Only Buy, especially a PB, take partial profits at a new high
Broad Bull Channel = Mostly Buy, but can Sell, Scalp more, swing less. Use Limit Orders, and scale in more
TR = Traders want VALUE; BLSHS. DO NOT believe moves will go far
When Looking at the Chart I must classify the cycle it is in to determine what it can do based upon what I see
In a Bear Market in each of these cycles only look to do the following
Bear BO = Strong Momentum; Sell any time, for any reason, Hold for a Swing
Tight Bear Channel = Only Sell, especially a PB, take partial profits at a new low
Broad Bear Channel = Mostly Sell, but can Buy, Scalp more, swing less. Use Limit Orders, and scale in more
TR = Traders want VALUE; BLSHS. DO NOT believe moves will go far
When Looking at the Chart I must classify the cycle it is in to determine what it can do based upon what I see
In a Bear Market in each of these cycles only look to do the following
Bear BO = Strong Momentum; Sell any time, for any reason, Hold for a Swing
Tight Bear Channel = Only Sell, especially a PB, take partial profits at a new low
Broad Bear Channel = Mostly Sell, but can Buy, Scalp more, swing less. Use Limit Orders, and scale in more
TR = Traders want VALUE; BLSHS. DO NOT believe moves will go far
Making money has nothing to do with being a nice person, it has everything to do with my ability to structure and execute trades. A lot of Traders are delusional and do not trade what they see with using context. Here is a chart of traders structuring BAD Trades.
Making money has nothing to do with being a nice person, it has everything to do with my ability to structure and execute trades. A lot of Traders are delusional and do not trade what they see with using context. Here is a chart of traders structuring BAD Trades.
The Key to making Money is learning how to Structure a Trade
Decide:
Whether to Buy or Sell
How much to risk (where to put stop)
What is my profit goal (reward)
There is no one way to trade.
The KEY is not Your Entry; the key is Structuring your trade, where is you stop, where you going to get out, what are you going to do if the market goes against you
The Key to making Money is learning how to Structure a Trade
Decide:
Whether to Buy or Sell
How much to risk (where to put stop)
What is my profit goal (reward)
There is no one way to trade.
The KEY is not Your Entry; the key is Structuring your trade, where is you stop, where you going to get out, what are you going to do if the market goes against you
Structuring a Trade - Bears Can Make Money Too!
Structuring a Trade - Bears Can Make Money Too!
Traders Have Goals: What are Yours …
Traders who consistently make money know how to structure trades that make sense.
They manage them well
Traders Have Goals: What are Yours …
Traders who consistently make money know how to structure trades that make sense.
They manage them well
If you see a 50% retrace on a Daily chart it is worth looking at the 5minute chart to see if there is an Entry.
This is not a common trading strategy but from time to time this could happen
If you see a 50% retrace on a Daily chart it is worth looking at the 5minute chart to see if there is an Entry.
This is not a common trading strategy but from time to time this could happen
a Higher TF - Use it to Find a Setup
a Higher TF - Use it to Find a Setup
Why would a trader use a Lower TF after they’ve entered a Trade?
They would use it to Reduce their Risk
The Best way to Trade is to look for a Strong Signal Bar and use appropriate Protective Stop
Traders should enter most trades using stops orders
To increase the probability of a profit, wait for a strong signal bar
When selling, wait to sell below a bear bar closing near its low
However after you structured a trade and determined the premise you entry does not mater, Protective Stop Place is key
The Best way to Trade is to look for a Strong Signal Bar and use appropriate Protective Stop
Traders should enter most trades using stops orders
To increase the probability of a profit, wait for a strong signal bar
When selling, wait to sell below a bear bar closing near its low
However after you structured a trade and determined the premise you entry does not mater, Protective Stop Place is key
Wait for Strong Signal Bar, Use Appropriate Protective Stop
Wait for Strong Signal Bar, Use Appropriate Protective Stop
a Trader should Never Risk More than how much of their account on any one trade?
a Trader should Never Risk More Than 3%, this is true even with a profitable trade
Beginning Traders should only be looking for swing Trades, and they should mostly swing Trade
That means that they will typically take 1-3 Trades a Day
Beginning Traders should only be looking for swing Trades, and they should mostly swing Trade
That means that they will typically take 1-3 Trades a Day
Use Market Cycle to determine How to structure your trade - The market is in a Never Ending Cycle
Learn to recognize where the market is in the cycle; Then trade appropriately for that part of the cycle
Use Market Cycle to determine How to structure your trade - The market is in a Never Ending Cycle
Learn to recognize where the market is in the cycle; Then trade appropriately for that part of the cycle
Anytime is a Great time to trade as there is volume on bars anytime the market deems.
Can enter on any bar at any time, as long as managed correctly
Anytime is a Great time to trade as there is volume on bars anytime the market deems.
Can enter on any bar at any time, as long as managed correctly
If the Market is Going Up use Binary(Two) Decisions to help identify the Traders Equation for a potential Trade
If the Market is Going Up use Binary(Two) Decisions to help identify the Traders Equation for a potential Trade
When should a Trade sell in a Bull Channel?
Only Sell in a Bull Channel if there is enough room for scalps. First shorts are limit orders, only for experts and only if stairs are present (PBs overlap BO points)
TR - Buy Low Sell High Scalp (BLSHS)
In a TR I am not looking for a Major Reversal, I am looking for a Minor Reversal (TRTL)
TR - Buy Low Sell High Scalp (BLSHS)
In a TR I am not looking for a Major Reversal, I am looking for a Minor Reversal (TRTL)
If a Market is going Down - Use Binary Decisions
Binary Decision:
Bear Trend, or Bear Leg in a TR
Binary Decision:
If Bear Trend, then is it a BO or Channel?
BEAR BO - Need to get short for any reason. Sell at least at market or on a PB
If a Market is going Down - Use Binary Decisions
Binary Decision:
Bear Trend, or Bear Leg in a TR
Binary Decision:
If Bear Trend, then is it a BO or Channel?
BEAR BO - Need to get short for any reason. Sell at least at market or on a PB
Can a Trader Buy in a Bear channel and if yes why?
Yes,
PB to go above BO points(overlap)
PBs need to go high enough to make room for at least a scalp
Only do it if youre an expert
First buys are limit orders, only experts and only if Stairs are present
Bear Channel = Market is Going Down
Bear Channel = Market is Going Down
TR - Buy Low Sell High Scalp (BLSHS)
TR - Buy Low Sell High Scalp (BLSHS)
Bull Channels - Broad and Tight
In a Broad Bull Channel the Buy ZONE is middle 3rd and bottom third (bottom half of most recent leg up) of the most recent leg up
- Bulls look to Buy PB into buy zone
- Bulls will buy reversals up
- Bull will buy close of strong Bear Bar(s) betting on its failure
- Trail Stop after a Strong BO to a new high
In a Tight Bull Channel trade it like a BO & Buy for any reason at any time.
Bull Channels - Broad and Tight
In a Broad Bull Channel the Buy ZONE is middle 3rd and bottom third (bottom half of most recent leg up) of the most recent leg up
- Bulls look to Buy PB into buy zone
- Bulls will buy reversals up
- Bull will buy close of strong Bear Bar(s) betting on its failure
- Trail Stop after a Strong BO to a new high
In a Tight Bull Channel trade it like a BO & Buy for any reason at any time.
Bear Channels - Broad and Tight
In a Broad Bear Channel the SELL ZONE is middle 3rd and top third (top half of most recent leg down) of the most recent leg down
- Bears look to Buy PB into buy zone
- Bears will buy reversals down
- Bears will buy close of strong Bull Bar(s) betting on its failure
- Trail Stop after a Strong BO to a new low
In a Tight Bear Channel trade it like a BO & Buy for any reason at any time.
Bear Channels - Broad and Tight
In a Broad Bear Channel the SELL ZONE is middle 3rd and top third (top half of most recent leg down) of the most recent leg down
- Bears look to Buy PB into buy zone
- Bears will buy reversals down
- Bears will buy close of strong Bull Bar(s) betting on its failure
- Trail Stop after a Strong BO to a new low
In a Tight Bear Channel trade it like a BO & Buy for any reason at any time.
Broad Bear Channel - Take Sell Signals, Okay to Buy
Broad Bear Channel - Take Sell Signals, Okay to Buy
Buy and Sell Zone
Sell ZONE is Upper 1/3rd of TR - Bears look to sell in it, or above; 60% probability the market will go down X # of pips
Buy ZONE is Lower 1/3rd of TR - Bulls look to buy in it, or below; 60% probability the market will go up X # of pips
Buy and Sell Zone
Sell ZONE is Upper 1/3rd of TR - Bears look to sell in it, or above; 60% probability the market will go down X # of pips
Buy ZONE is Lower 1/3rd of TR - Bulls look to buy in it, or below; 60% probability the market will go up X # of pips
TR, But the market is still in a Bear Channel
TR, But the market is still in a Bear Channel
What happens if I missed the Best Signal, what do I do?
There is no “best” signal or perfect trade, but there are many good signals every few bars
It Never matters when you begin trading as every part of the cycle offers profitable setups
Traders Equation: 40 - 60 Rule
Traders Equation: 40 - 60 Rule
What is the best trading risk - reward trade at a minimum for a Swing Trade?
Swing Trade for a Reward at Least 2x Risk
To take a Low Probability Trade what would I need at a minimum for a positive traders equation?
I need at least 2x Actual Risk for a positive Traders Equation. 2x Initial Risk always results in a positive Traders Equation
When the Probability is High is 1x Risk Good Enough?
(Buying after a Strong BO is High Probability) Yes 1x is good enough risk when Probability is high.
Be Patient - Do not Scalp out EARLY
Be Patient - Do not Scalp out EARLY
What is a reasonable default plan for taking profits?
Take half off at 2x Initial Risk (When you do not know where to take profits)
Take 25% off at 3x Initial Risk
Swing Balance, and Trail the Protective Stop, Exit before Close of the Day(End of Session)
What is a reasonable default plan for taking profits?
Take half off at 2x Initial Risk (When you do not know where to take profits)
Take 25% off at 3x Initial Risk
Swing Balance, and Trail the Protective Stop, Exit before Close of the Day(End of Session)
Exit - If Sell Signal, Stop is Hit, or End of Session
Exit - If Sell Signal, Stop is Hit, or End of Session
After a BO you can Enter Later - on a BO or a PB
After a BO you can Enter Later - on a BO or a PB
It is ok to wait For an Always In sentiment to be clear before entering the market for a trade, What are some Always In confirmations?
Strong BO
Series of consecutive trend Bars
