I sent out the following post via social media earlier this week. It's a theme I've pushed quite a bit over the last few years because I feel it's incredibly important.
No matter what markets you trade. No matter what timeframe you trade. No matter what strategy you trade.
There will be price sequences where you are in sync with the movement and smashing it out of the ballpark.
And there will be price sequences where you are out of sync and just nothing seems to ever go right.
Here's the post:
Why is this important?
The quicker you can recognise change to favourable or unfavourable conditions, the quicker you can adapt tactics to suit.
In response to the post, I received the following question on twitter:
- What are some things one can do to put together a framework for identifying these transitions?
Great question!
Here's one thing that you can do…
Before you can study the transitions, you need to know what type of price sequences lead to you underperforming. And which lead to exceptional performance. From that foundation, you can study the transitions in and out of these sequences.
So here is the plan…
Something you might want to consider post-session…
Examine the price sequences where you just couldn't read the market bias!
These are the sequences where you have no idea what is going on. "It's bullish. No… it's bearish. No… wait.. hang on…it's going… damn it! I have no idea at all."
The sooner you can recognise this (and accept it) the sooner you can stand aside and limit damage, waiting until some clarity returns to the market.
Post-Session:
1. Take note of any price sequences which resulted in complete uncertainty about the directional bias.
2. Review the conditions – market structure, price action and human performance factors – which may have influenced your decision making.
3. Document your findings.
4. Over time, you'll start to identify those conditions which have the potential to put you out of sync with the market, allowing you to recognise and adapt more quickly in future.
Examine the price sequences in which you found yourself fighting the bias for multiple trades!
These are the sequences in which you were confident that you had picked a market direction, but then got stopped out of one trade… and then another… and maybe more… as you fought what was in reality a completely opposite bias. Hindsight is a beautiful thing. But it's also where we learn. Study these sequences and learn what puts you 180 degrees out of sync.
Post-Session:
1. Take note of any price sequences which resulted in multiple attempts to trade the market from the wrong side.
2. Review the conditions – market structure, price action and human performance factors – which may have influenced your decision making.
3. Document your findings.
4. Over time, you'll start to identify those conditions which have the potential to put you out of sync with the market, allowing you to recognise and adapt more quickly in future.
Examine the price sequences in which you read the market bias well but just couldn't execute in sync with the market!
These are the sequences in which were 100% spot-on regarding the market bias, but just couldn't get those trades going. Choppy price action leading to hesitation. Or maybe tripping stops and leaving you watch from the sidelines while it goes to the target without you.
Post-Session:
1. Take note of any price sequences which resulted in a correct bias but a complete inability to profit from your market read.
2. Review the conditions – market structure, price action and human performance factors – which may have influenced your decision making.
3. Document your findings.
4. Over time, you'll start to identify those conditions which have the potential to put you out of sync with the market, allowing you to recognise and adapt more quickly in future.
Examine the price sequences in which you read the market bias well AND executed well.
These are the sequences in which you just smash it out of the ballpark. Not only can you see the market bias, but every fibre of your being senses it as well. And your timing just fits perfectly.
Post-Session:
1. Take note of any price sequences which resulted in A+ trading and clear outperformance.
2. Review the conditions – market structure, price action and human performance factors – which may have influenced your decision making.
3. Document your findings.
4. Over time, you'll start to identify those conditions which have the potential to put you quickly in sync with the market, allowing you to recognise and exploit the situation more quickly in future.
A whole lot of work, but it will pay you back a thousand-fold.
Happy trading,
Lance Beggs
