The problem with many trading mentors is whilst some can teach you good ways to read/trade the market, they can also transfer cognitive biases that are not relevant to you.
For example, a mentor might teach you a great pattern that repeats regularly and then say: “but don’t trade Fridays. I find it a really bad day for trading”.
If they neglect to tell you that Thursday nights they’re always out drinking with their mates, are hungover on Friday’s and can’t trade for shit, that’s totally irrelevant advice and it’s detrimental to your progress.
Obviously that’s a bit of an extreme example but hopefully you get my point.
Once again, we’re back to the power of your journal.
By all means listen to what people say. But test everything for yourself.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
For the record, here are some things I’ve been told by traders who I know are making money and who I’ve really looked up to and yet I simply do not agree with:
1. Move to break even as quickly as possible so you have a free trade.
2. Use a time stop. If the market doesn’t move in your favour quickly, get out (the trader saying this was a scalper and was talking in minutes)
I'm known for always bashing the concept of moving to breakeven on a trade.
I wanted to quickly clarify my thoughts on this because contrary to what people might think, they're not black and white.
My mentor said, back in the day, that one of your priorities when trading should be to get to BE as quickly as possible so you had a "free trade".
He meant as soon as the market has started to move away from your entry point, move your stop to entry so you cannot lose.
However, I found one thing happened time and time again. As soon as I moved to BE, the psychological pressure was off - the "free trade" felt comforting. But the market would often come back to my entry, hit my BE stop and then move in the direction I had been placed.
$1711.5 in Gold is the last key HTF level before the big lows at $1676. At a level like this, probabilities shift in favour of stabilisation/reversion before any continuation lower.
If you’re short, you might wonder what to do. Whether to take a partial. Whether to close completely and try and sell again on a rally. Whether to get really clever and try and close shorts and take it long only to short again later. There are naturally lots of options.
I have always found over time, it pays me to try and fully hold my position (and add - more on that shortly), so in a situation like this I am prepared for it to move against me and potentially give back profit to the market if it hits my stop.
This is a story regarding my last tweet about taking a day off sometimes.
Several years ago, I backed a few traders. One was ex bank, now starting out on their own without interbank access and removed form the hive where you could pick up the phone or get a feel from the floor.
This person came to me after several months of blow ups.
They had a good market read but had identified their biggest weakness was discipline around risk.
At the bank their risk was monitored. Safeguards were in place to stop blow ups.
At home there was no safety net.
They reflected on these blow ups and quickly realised there was a two day pattern.
They would be grinding out a living. In and out each day. The flow state.
But then they would have a large loss day that undid a lot of their work, left them frustrated and destabilised them.
This works in any market but I am referring to Bunds (as tweeted 60 mins back)
After such a clear and violent breakout on the H1, mark up the high of the range and the LHPB which is the very last area price found resistance before the move occurred
Although there are many variables to take into account, in general, the LHPB of a sold level break is the price point I look to buy the dip. However, nowadays, on swift breaks such as this without a D1 bias, the target becomes the range high...
...and if we get a 60m close down through that range high before or after target is hit, the range high price point becomes the price to offer it out short for a run to new lows.