Thread by @FuturesTrader71

A fundamental question that is overlooked as traders jump into indicators, tools, chart types, patterns, moon cycles or whatever: why should the market reward your trade? Why here? Why long or short? For what target and at what stop? Cont... #trading

What inefficiency are we exploiting? Why is this price unfair? Is our evidence based in fact? Statistics? Or.... #trading

Is it because our moving average crossed & that's all there is? Or maybe some dot showed up on our chart?

Think about it: Everyone is seeing the same price, time and volume. These are the elements.

Knowing that, what is it we are doing that deserves to be rewarded? #trading

As a trader for me, if someone has a trade on and can't impulsively answer the basis for that trade, then they don't deserve my risk capital. Period.

One more thing to round this out... #trading

It needn't be complex. In my own trading, cld be as simple as:

1) Range statistic is extended beyond norm (1 Sigma)
2) Price is not moving down as easily as it has been
3) A key area has been tested
4) Rotations are expanding the other way
5) There is sufficient upside vs risk

The truth becomes real as soon as the trade is on. Without a firm idea & logic that we believe, it is hard to let the trade work/run.

Break it down: Why should I get paid on this trade? If I don't know then I'm losing. #trading

RT if useful

Another angle: Would you invest in a bank that loans money to borrowers who dreamed up an idea without proper study, no merit, no reasonable expectations, no multiples of reward per unit of risk & a person who cannot execute with discipline?

No, why would u do so in #trading?

See this thread for the part we have to master next for #trading once we understand our simple edge...

https://twitter.com/FuturesTrader71/status/1311368026315354112?t=UxfJNexmHB9CgNPuw_MXMg&s=19

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