Get high quality reps in.
Make great trades. Avoid bad ones.
Consistently.
Results follow.
"Stay in the game long enough to get lucky.
Also, I can't think of a single example in my
whole life where 'keeping it simple' worked against us."
— Charlie Munger
You gotta do the thing to get good. 1 hour of doing is worth more
than 10 hours of consuming:
Create a playbook of your best trades, then continuously add
stock chart examples, and study them
Backtest playbook
Create a trade plan
Trade the plan (real or sim)
Do an After Action Review (AAR)
Build a massive mental model with thousands of reps
Biggest drivers of free markets:
Price Context, Especially HTF, then TTF
News, Catalysts, Moving Sectors
Past Flows, Positioning, Supply v. Demand
Current Flows, Supply v. Demand
I'd rather be late and right, than early and wrong. Patience pays.
What do you actually want to see happen for you to get in?
Let the market decide entries and exits, stops and targets. Limits, Closes,
and RBOs 2RBOs, not your emotions.
What's HTF bias, context, news, pattern, pushes? Write it all down. Is this
entry aligned with HTF bias? No? Or don't know? Don't trade.
Is this entry, stop, or target picture perfect? No? Don't do it.
Massive whales wait for key levels and major battles, and that level may not even
hold. Why trade without there help? They might not even be right at
that key level.
Don't go on tilt, size up, and overtrade. You will lose vastly more
sums of money.
About to enter a trade? What dollar amount are you willing to lose?
Where is the stop? What's the size?
Do everything you can to stay in this game. It's all about survival.
If you can't trade small, then you definitely can't trade big.
Focus on what you're doing. Cut out the distractions and noise.
Trade with the market via RBOs, not against. A rising tide lifts all
boats, and vice versa.
Don't do this alone. Your environment -- especially the people
around you and the content you consume -- can make all the
difference between success and failure.
Diversify your mental health. You will lose a lot in trading. So
what other hobbies or things can you still get victories today?
Comparison is the thief of joy. Don't compare your Chapter 2
progress to someone else's Chapter 20.
You can't get better if you don't know what you're doing wrong. So
do After action reviews to find lessons learned. What'd you do
right? What'd you do wrong?
Focus: Most attention, volume, and news or great pattern context.
Explosive moves
Missed a trade? No worries, sim trade it for more reps, or wait for
more info.
Not sure? Don't know? Don't trade. Wait for a better trade.
Worried? Scared? Don't trade. Or size down and let the market
determine entries and exits.
Strong moves tend to get 2nd moves, less so at key level tests or TL
BO PB/retracement shakeouts.
Where is the next explosive trade level?
What's a great entry that may fail and trap traders?
Set alerts and targets, don't stare at PA, it's toxic.
Technical Analysis (TA)
Review and Update TA on ALL timeframes every 5 bars:
DTL UTL, potential future DTLs UTLs at TL BO Counter-Trend
PB to 33% 50% 75% RT
Major Tests and Breakouts of: (TTF and especially HTF)
DBs DTs
TLs
Where did price come from before this test/BO? Consolidation
or spike? Be wary of the latter unless HTF is uber on your side.
Pattern, Trend, Counter-Trend
Pushes, 1, 2, 3, 4
Key levels, TL DB DT HNS RBO BOPB
Analysis, Long Biased or Short Biased based on HTF
Price moves from line to line, major battle to major battle,
TL to TL, TL BO
Counter-Trend PB to 33% 50% 75% RT, OHLC
Key levels to Test or BO: DB DT UTL DTL HNS RBO BOPB
Good Entries
Stops
Volume analysis, buy volume vs sell volume (lifting offers vs
hitting bids)
Logarithmic charts, OHLC, bias closes for exits, highs lows with RBO
for entries
UTL DTL are the 3 widest points
Sup/res have one touch or the most touches
Current UTL DTL, potential future UTLs DTLs
Strong moves and big bars usually get 2nd moves
Strong moves and big bars leave orders behind, they get filled
during PBs.
UTL DTL or key level fails only with a BO close
Wicks do the damage. Closes tell the story.
HTF Bias, Context, News, Pattern, Pushes
Write it down on the chart.
Great pattern or key level?
News? Massive attention and volume?
Big move recently?
Overextended? Due for a big reversal?
2nd/3rd push? Trend might need a 25%-75% retracement before UTL DTL
resumption
TTF Pattern, Pushes
Key levels: DB DT UTL DTL HNS RBO BOPB
Key level BO close or TL BO close? BO close PB RBO? Wait for PB to
key level test?
Bull bear BO spike close PB RBO or wait for PB to test close
RBO/2RBO
Bull bear BO close fail stop out
UTL DTL BO close
UTL DTL BO close fail RBO 2RBO
UTL DTL BO close PB RBO
UTL DTL BO close PB to BOPB HNS RBO DB DT test close RBO 2RBO new
trend continuation
UTL DTL BO close Push to DB DT BOPB TL test close RBO 2RBO weaker
trend continuation
Test RBO/2RBO fails stop out close
DB DT BO close
UTL DTL BOPB HNS DB DT test close bounce failure at DB DT BOPB
RBO/2RBO
UTL DTL test close RBO 2RBO trend continuation
DB DT test close RBO 2RBO trend continuation
BOPB test close RBO 2RBO trend continuation
HNS or RBO test close RBO 2RBO
PB RC RBO 2RBO 3RBO 4RBO Wedge reversal
Pattern entry fails stop out close or RBO 2RBO stop out, trapped
traders
Entries
Bet Risk on Trade / Points to Stop = Share Size
About to enter a trade? What are you willing to risk? How many points
to the stop? Share size?
Mark entries on the chart
Shares or options? Why?
Before entry, double-check size, DTE, spreads, near EOD, 2:50 on
close orders, or Friday
I'd rather be late and right, than early and wrong.
Let the market decide entries and exits, stops and targets. Not your
emotions.
Is this entry picture perfect on TTF and HTF? If not, don't trade.
BO close or wait for a PB RBO or PB to a key level test?
Is this entry a pattern of yours? No? Then don't trade it.
Don't know? Don't trade. Set alerts.
Great TL DT DB BO? What happens if it fails?
Limit Close RC RBO 2RBO 2nd Entry 3RBO 4RBO Wedge
TL/DB/DT/Big bar BO close or PB RBO new trend
BO but wait for PB to BOPB HNS RBO DB DT test reversal UTL DTL
resumption
Pattern test or BO fails stops out, trapped traders, because big
picture context
Bet on New Trend, Trend Resumption, Trend Reversal, or Trading
Range.
Should you be looking to buy or sell here based on big picture
context HTF?
Should you join the BO or wait for a PB?
3rd push RC RBO
Is this entry a scalp short only because you should be looking to
buy? And vice versa
Buy at support TLs, Sell at resistance TLs
An Options potential gain: look at ATM price and compare to your
contract price.
Stops, Trailed Stops, and Bet Risk
Stop far away? Trade smaller. Don't use LTF stop, use TTF stop.
Mark stops and trailed stops on the chart
Respect your stops to protect your account. Can always get back in.
Let the market decide entries and exits, stops and targets, not your
emotions
1 tick BO stop or require at least a small push after BO?
Update stops and targets on the chart after BOs
Bet size? Dollar Risk on this trade you're willing to lose?
Including commissions and exchange fees.
Prior swing high low
Prior bar or entry bar high low
2nd 3rd Push RC RBO 2RBO or should it just be trailed to swing high
low?
Big bar close or 2RBO near a target
Overextended move DT BO RBO or DB BO RBO
Where is BOPB HNS high low stop? Not a bounce RBO or HNS 2RBO hold
but the actual high low stop?
Trail Stop, can always get back in
Trail to new swing high low created by a BO
Trail to Breakeven or EOD
Trail to TL test RBO/2RBO
Trail to TL BO reversal
Trail to BO spike reversal
Scared? Let stops or targets decide, trade the plan, not emotions
Set alerts and targets, don't stare at PA.
If not using a hard stop, don't be stingy. Get out. Protect what you
have.
Daily loss limits, protect what you have, and stop emotional trading
Targets
Respect your targets to protect and grow your account. Can always get
back in.
Key level test limits or nearby closes: TL RBO HNS DB DT BOPB
Bias closes, not wicks. Nearest targets first, not what you hope
Close or RBO near a target
Big bar close
RBO 2RBO 3RBO 4RBO
2nd 3rd push RBO 2RBO
Have Patience, let targets or stops decide exits, not your emotions
Lock in profits along the way, reduce risk
Update stops and targets on the chart after BOs
After Action Reviews (AAR)
Lessons learned
Worst Mistakes:
Wrong HTF bias call
FOMO need to trade even if HTF or TTF is not clear.
Not wanting to miss a big move/FOMO so I overtrade long and short,
increase size to make up for losses, and lose way more money.
Not waiting for RBO
Not waiting for a RBO, join the trend, or avoid entry RBO that never
triggers
Not updating UTLs and DTLs every 5 bars
Before entry, not double-checking order, DTE, right contract, near
EOD or weekend.
Not trading with HTF pattern bias on the TTF. Scalp if not, but
focus should really be on joining the HTF pattern.
Trading too big, emotional, not the chart
Not respecting the stop or trailed stop, stopping out emotionally
Not getting out at stop, being stingy with limit orders
Not waiting for TTF to match up with HTF bias
Not taking a 2RBO entry over a bad signal bar, especially at a key
level test
Disclaimer: Most traders fail. Most traders lose all or most of their
money trading. This is not financial advice. Nothing on this site is a
recommendation to buy or sell any security. This is my degenerate trading
strategy. Read at your own peril.
