Every morning at some point prior to the equities cash session open each of us prepares a sheet detailing everything from bias and sentiment to where we think the key support, resistance and prior volume structures are, to the levels we will be looking to potentially trade. Finally, we condense these items along with any thoughts on directional pressures, particularly tough areas of congestion, opinions, feelings, etc. into comments on the daily trade plan worksheet. This REALLY forces us to think about what we are saying, whether or not it makes sense, and that it fits into the big picture for the day. It is surprising how much the simple act of writing this stuff down refines your thinking.
The second part of what we will be sharing is an educational example for the day. The example may focus on market context, price action, orderflow, risk model interaction, or some combination thereof. The idea is to get members wheels turning about how best to develop their own process that makes sense to them and execute it. The example is posted and annotated every day sometime after the close and is generally discussed actively in the member forum.
By following these two daily pieces of content and interacting with the membership you should be able to learn and improve your trading just as we do by seeing what consistently works, what doesn’t, and how best to overcome errors. No matter how successful you become or how big you trade, you are always making mistakes and always learning and improving. Being a professional really just means you have figured out how to not have your mistakes destroy you.
When you look at the daily trade plan worksheet you will notice that despite our opening directional opinions, which are only chosen to edge up probabilities for the potential trades, there will always be options we are looking at in both directions and never just one idea. We don’t profess to know or try to predict what the market will do. Instead, we simply identify what we think the best trade opportunities are and see which, if any, ends up being the trade that meets our final criteria. It is all about probability and piecing together little clues to try to give yourself little edges that increase your probability of picking the right move in the right direction. Don’t forget, when you strip out all the details what you are left with is a binary environment. You have to guess what the market will do in the short run to win a lot of trades. If you are very good at being “right” you can have a lower reward to risk ratio and still be profitable. But you can also be “right” much less often and still do as well if not better assuming you maintain a greater reward to risk ratio. Being “right” just half the time at best can be a very lucrative pursuit and one which is employed by a large number of professional traders. Don’t let anyone tell you differently.
IMPORTANT: We have to limit communication to every little question we get in the interest of time, so please understand if we don’t respond to every question or request for clarification from the general public. This blog was never intended to be a commercial enterprise. Everything on the front of the blog is FREE. This blog has already taken up WAY more time than we expected. So much so we have had to hire and pay an administrator out of our own pocket. So please don’t be critical and try to appreciate how far we are sticking our necks out to try to give back and help you guys. Besides, the educational content, charts, and webinars should be all anyone needs to understand how we trade. You may have to study and follow along for a while to digest it, but it really is quite simple. That said, we will be around of course and if something catches our eye on a topic we may answer or contribute publicly which may end up adding to the knowledge base.