Your Strategy & Tactics
Knowing what a strategy really is and how it relates to other aspects of trading will give you a clearer and more organized understanding of the trading process. Once you have this understanding, knowing the major requirements that are needed to make any strategy a money-making one with a sustainable edge will allow you to quickly judge and avoid losing strategies, while building your strategy with the correct elements that can make it profitable.
It’s one thing to have a good strategy, but it’s another thing to be able to take that strategy and create a practical trading plan out of it that is customized for the current trading day. Having a structured process will allow you to develop such a plan, and will remove you from the realm of random trading into the professional sphere.
Seeing firsthand how to go through the first step of our daily trade plan development process in a live scenario will equip you with the knowledge needed to implement it in your trading.
Correctly identifying the zones where price is likely to react or reverse is a key skill that will allow you to pick much better entries and also be able to know where it’s best to exit to protect your profits. Most traders use indicators and patterns to enter and exit, while you’ll learn to use the more powerful realities of developing market structure.
This is one area that causes problems for nearly every trader. Very few things are written about it in the books, and there are numerous myths regarding how to treat news. Once you have a better understanding of this subject, you’ll be able to avoid costly mistakes while gaining valuable insights into likely market behavior.
All the trading books focus on entries and set-ups. Very few sources explain the importance of gauging volatility and the incredible number of ways to adjust your trading based on it. If there was one major difference between professional and retail traders, it’s the former’s understanding and integration of volatility principles into all aspects of their trading.
One of the greatest causes of losses is when traders “get run over by a freight train”. That is, they fade a strong trending day and take many losses. On the flip side, one of the greatest causes of mediocre performance is not capturing large winners. At the root of both of these problems is the lack of ability in correctly gauging the odds of having a trend day. Once you know the 5 pre-market conditions that increase the odds of trend, your trading will make a marked leap forward.
A strategy without a practical and actionable trade plan is useless. Knowing how to create a custom trade plan for any given day you’re about to trade will give great structure to your trading and give you a much better chance at exploiting market movement. This step is what brings everything together, and it will be your key foundation for professional trading.
Having a scenario based trading plan before the market opens will serve as the tactics to put your strategy into action. But once the market is open it’s important to read it dynamically to see which scenarios are likely to play out, and what the best way to trade the day will be. Learning the art of reading the open and early trading can give you a great edge and help you gauge the entire day early on.
The markets are quite complex, but having some clear principles can guide you in navigating them, and give you a good structure that you can use to help you understand many different subtle situations. This guidance and better understanding will ultimately allow you to become better with your intraday tactics, which will vastly improve your trading.
Seeing high-level principles actually play out in real markets ingrains the concepts more deeply. Once you see the action unfold and get insights into the thinking that goes on as we read the markets live using the principles, you’ll be in a much better position to transfer the knowledge over to any market you trade.