How Quickly Can You Identify the Current Market Environment?

Here's a documentation & learning tip which can really add significant value to your trading knowledge, and in time to your level of skill and confidence.

Create and maintain a knowledge base documenting everything you know about every aspect of market environment:

  • How to recognise the environment / the features of the environment.
  • The nature of price movement within the environment.
  • How to identify a likely change of environment.
  • How to profit within the environment.

 

Classify environment type in any way you wish. As a starter you might want to go with just four environment types:

  • Trending, volatile
  • Trending, non-volatile
  • Ranging, volatile
  • Ranging, non-volatile

 

Within each environment type you should add subcategories. For example:

  • Features
  • Price Movement
  • Signs of Environment Change
  • Trading

 

Break each of these down to subcategories. I'll let you determine your own subcategories over time, as your document grows.

The following image gives the general idea, although the format could vary from notebook to loose-leaf folder to One Note document to spreadsheet or even a mindmap. Whatever works best for you is fine.

identify the market environment

Set it up now… and build on it by recording ANY significant observation or lesson discovered during trading, during your post-session reviews or during ongoing education whenever you find a new insight or some new information. Make it a living, growing document.

You'll find it becomes an exceptional tool for your ongoing review and study. Plus if you stretch yourself to find new information as you trade or review your sessions then it will become a vital component of your deliberate practice learning processes.

Happy Trading,

Lance Beggs

PS. For YTC Price Action Trader readers, this is a subset of the Lessons Learnt Journal discussed in Chapter 14, P108.

PPS. Related content: See "The Greatest Trading Book – Ever!" at http://yourtradingcoach.com/ebooks/


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YourTradingCoach – Admin

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