market-shows-sympathy-and-it-surprises-you

Market shows sympathy and it surprises you..

We all know that perfection is impossible in trading. It is good to keep that at the back of our mind which will help us in setting realistic process-oriented goals. But if it is emphasized so much, it acts as an obstacle for our growth in trading. As trading is all about adaptability, if there is no growth in terms of skill, there will be no survival.

Let’s talk about the markets for a while. Do you think markets are cruel most of the time? Do you believe that most people enter markets just to get slaughtered?

If your opinion on markets matches with that of the above, you and I are on opposite sides. For me, the market shows a lot of sympathies most of the time and it is rarely cruel. I know you all want the same from the markets, perfection is the only way to get it. You might be wondering that the metaphors about markets say that we can never perfect the markets and I am asking you to perfect it. True. You cannot perfect the markets. But you can perfect the methodology you are using. Sometimes, perfection is not about learning something new, but to rearrange the things that you have already learnt in proper order.

We have a great strategy in hand to trade ( YTC ), that is working wonders for a lot of traders. But most of the people are not getting consistent results out of it. There might be two reasons for the inconsistent profits.

They don’t understand the methodology incomplete. If this is your problem, then there is no way you can expect help from others. Those who perfected the methodology can write hundreds of articles and books, but if you don’t understand the core fundamentals on which the strategy is built, adaptability is next to impossible. We, humans, always want to jump into the meat of the topics neglecting the basics as our ego tells us that we know them, and that is the reason why there are very few successful people in trading who keeps ego at check. The basics are very very simple, but we always underestimate the power of simplicity. Check whether you understand them or not before moving forward. If you haven’t, you can find some help here.
They know everything about the methodology, but the units are not properly arranged. I was one of these guys a few years back. It is very hard to find guidance from others if you are stuck in this loop unless the outsider has faced this issue sometime in his career. Reading the book from which you have learnt the methodology, again and again, is of no help, as you already know everything in that damn book.
I want to talk about the second point in detail because I have seen this in most of the wannabe traders. You might think that it is a simple issue, but it’s not. Consider this example. We all know how to ride a bike and you can easily learn how each and every part of the bike works from the internet. Simply put, you can learn about the function of each and every screw in a bike as we are in the information age. But, can you fix the dismantled bike?? Can you make up the bike if I remove each and every screw out of it and give it to you? Of course not. We need a different set of skill to do that, ie. the skill of mechanical engineers. So, come out of the illusion that rearranging stuff in a proper order to make it work is an easy task. It needs skill and it needs a lot of background work.

In both of the above trades, the timing is amateur. I would have scratched both the trades for a small loss if I was emotionally weak at that moment (which is so common in me). But both the trades worked out so well. Things like these happen a lot in my trading, where I expect the trade to hit my stop and calling myself all the names I can, and markets cheer me up by giving decent profits. Don’t think that it’s because of luck or some other stupid stuff. There is a lot of work behind that from my side. Let’s inspect the above trades to see some common features in the above two trades.

Here are they-

The structure of the market. I know the TTF structure It was crystal clear, ie. trend.
The future bias. I know where it is likely to go after this bull and bear fight (PB).
I know the price levels where I would like to take chances and take a position in the direction of future bias.
That’s it. These are the three things that I want to see on my charts before placing my fingers on the keyboard to enter the parameters. Honestly, these three are the only reasons behind the sympathy of the markets on me. Trust me, I got surprised a lot by the markets.

Perfect the three points I mentioned above. If you master them, exhaustion in the level and timing the entry are the only things remained and you can improve them with experience. It is impossible to perfect these two things, we can only make them effective by record and review.

I have mentioned a lot of times. But I will give the blueprint/ flowchart of my trading decision making here for the sake of convenience .

Structure of the markets.
Future Bias and the type of setup
Price level
Weakness
Exhaustion
Timing the entry.
Most of the traders are too much focused on the 6th point and are obsessed with getting the right entry when that is not important in comparison with the above five.

User says:
In the above mentioned Crude trade, what was your thought process behind not making a buying decision at the upper red line when price pulled back down there? Was it because pullback in trading time frame TTF had shown strength i.e. couple of low close bear candles?

Reply:
As it has broken the minor support, I treated it as a BOF, so waited for a second attempt fails, but price rallied without giving me an entry. Then the new pivot low formed became my reference price level and I decided to take long on weak retest or the BOF of that level. But the market fell down sharply breaking the intermediate pivot low and I sensed some signs of exhaustion at the bottom level and gave my entry. But later, it turned out to be a BOF of the bottom level where I have taken TST of that level. My conclusion about exhaustion was a bit early