How to Trade Flashcards
Most Important Rule in the Markets - PRICE IS TRUTH
Low probability events trap traders into thinking the is doing something it cannot do
Their denial costs them money because the market is creating a Pain Trade.
Sometimes the Low Probability event takes place and you have to go with it as you have to trade what you see
TRADE WHAT YOU SEE AND NOT WHAT YOU HOPE TO SEE OR EXPECT TO SEE

Most Important Rule in the Markets - PRICE IS TRUTH
Low probability events trap traders into thinking the is doing something it cannot do
Their denial costs them money because the market is creating a Pain Trade.
Sometimes the Low Probability event takes place and you have to go with it as you have to trade what you see
TRADE WHAT YOU SEE AND NOT WHAT YOU HOPE TO SEE OR EXPECT TO SEE

When Looking at the Chart I must classify the cycle it is in to determine what it can do based upon what I see
In a Bull Market in each of these cycles only look to do the following
Bull BO = Strong Momentum; Buy any time, for any reason, Hold for a Swing
Tight Bull Channel = Only Buy, especially a PB, take partial profits at a new high
Broad Bull Channel = Mostly Buy, but can Sell, Scalp more, swing less. Use Limit Orders, and scale in more
TR = Traders want VALUE; BLSHS. DO NOT believe moves will go far

When Looking at the Chart I must classify the cycle it is in to determine what it can do based upon what I see
In a Bull Market in each of these cycles only look to do the following
Bull BO = Strong Momentum; Buy any time, for any reason, Hold for a Swing
Tight Bull Channel = Only Buy, especially a PB, take partial profits at a new high
Broad Bull Channel = Mostly Buy, but can Sell, Scalp more, swing less. Use Limit Orders, and scale in more
TR = Traders want VALUE; BLSHS. DO NOT believe moves will go far

When Looking at the Chart I must classify the cycle it is in to determine what it can do based upon what I see
In a Bear Market in each of these cycles only look to do the following
Bear BO = Strong Momentum; Sell any time, for any reason, Hold for a Swing
Tight Bear Channel = Only Sell, especially a PB, take partial profits at a new low
Broad Bear Channel = Mostly Sell, but can Buy, Scalp more, swing less. Use Limit Orders, and scale in more
TR = Traders want VALUE; BLSHS. DO NOT believe moves will go far

When Looking at the Chart I must classify the cycle it is in to determine what it can do based upon what I see
In a Bear Market in each of these cycles only look to do the following
Bear BO = Strong Momentum; Sell any time, for any reason, Hold for a Swing
Tight Bear Channel = Only Sell, especially a PB, take partial profits at a new low
Broad Bear Channel = Mostly Sell, but can Buy, Scalp more, swing less. Use Limit Orders, and scale in more
TR = Traders want VALUE; BLSHS. DO NOT believe moves will go far

Making money has nothing to do with being a nice person, it has everything to do with my ability to structure and execute trades. A lot of Traders are delusional and do not trade what they see with using context. Here is a chart of traders structuring BAD Trades.

Making money has nothing to do with being a nice person, it has everything to do with my ability to structure and execute trades. A lot of Traders are delusional and do not trade what they see with using context. Here is a chart of traders structuring BAD Trades.

The Key to making Money is learning how to Structure a Trade
Decide:
Whether to Buy or Sell
How much to risk (where to put stop)
What is my profit goal (reward)
There is no one way to trade.
The KEY is not Your Entry; the key is Structuring your trade, where is you stop, where you going to get out, what are you going to do if the market goes against you

The Key to making Money is learning how to Structure a Trade
Decide:
Whether to Buy or Sell
How much to risk (where to put stop)
What is my profit goal (reward)
There is no one way to trade.
The KEY is not Your Entry; the key is Structuring your trade, where is you stop, where you going to get out, what are you going to do if the market goes against you

Structuring a Trade - Bears Can Make Money Too!

Structuring a Trade - Bears Can Make Money Too!

Traders Have Goals: What are Yours …
Traders who consistently make money know how to structure trades that make sense.
They manage them well

Traders Have Goals: What are Yours …
Traders who consistently make money know how to structure trades that make sense.
They manage them well

If you see a 50% retrace on a Daily chart it is worth looking at the 5minute chart to see if there is an Entry.
This is not a common trading strategy but from time to time this could happen

If you see a 50% retrace on a Daily chart it is worth looking at the 5minute chart to see if there is an Entry.
This is not a common trading strategy but from time to time this could happen

a Higher TF - Use it to Find a Setup

a Higher TF - Use it to Find a Setup

Why would a trader use a Lower TF after they’ve entered a Trade?
They would use it to Reduce their Risk

The Best way to Trade is to look for a Strong Signal Bar and use appropriate Protective Stop
Traders should enter most trades using stops orders
To increase the probability of a profit, wait for a strong signal bar
When selling, wait to sell below a bear bar closing near its low
However after you structured a trade and determined the premise you entry does not mater, Protective Stop Place is key

The Best way to Trade is to look for a Strong Signal Bar and use appropriate Protective Stop
Traders should enter most trades using stops orders
To increase the probability of a profit, wait for a strong signal bar
When selling, wait to sell below a bear bar closing near its low
However after you structured a trade and determined the premise you entry does not mater, Protective Stop Place is key

Wait for Strong Signal Bar, Use Appropriate Protective Stop

Wait for Strong Signal Bar, Use Appropriate Protective Stop

a Trader should Never Risk More than how much of their account on any one trade?
a Trader should Never Risk More Than 3%, this is true even with a profitable trade

Beginning Traders should only be looking for swing Trades, and they should mostly swing Trade
That means that they will typically take 1-3 Trades a Day

Beginning Traders should only be looking for swing Trades, and they should mostly swing Trade
That means that they will typically take 1-3 Trades a Day

Use Market Cycle to determine How to structure your trade - The market is in a Never Ending Cycle
Learn to recognize where the market is in the cycle; Then trade appropriately for that part of the cycle

Use Market Cycle to determine How to structure your trade - The market is in a Never Ending Cycle
Learn to recognize where the market is in the cycle; Then trade appropriately for that part of the cycle

Anytime is a Great time to trade as there is volume on bars anytime the market deems.
Can enter on any bar at any time, as long as managed correctly

Anytime is a Great time to trade as there is volume on bars anytime the market deems.
Can enter on any bar at any time, as long as managed correctly

If the Market is Going Up use Binary(Two) Decisions to help identify the Traders Equation for a potential Trade

If the Market is Going Up use Binary(Two) Decisions to help identify the Traders Equation for a potential Trade

When should a Trade sell in a Bull Channel?
Only Sell in a Bull Channel if there is enough room for scalps. First shorts are limit orders, only for experts and only if stairs are present (PBs overlap BO points)

TR - Buy Low Sell High Scalp (BLSHS)
In a TR I am not looking for a Major Reversal, I am looking for a Minor Reversal (TRTL)

TR - Buy Low Sell High Scalp (BLSHS)
In a TR I am not looking for a Major Reversal, I am looking for a Minor Reversal (TRTL)

In a TR am I looking for Major or Minor Reversals?
In a TR I am looking for Minor Reversals, TBTL at a minimum
If a Market is going Down - Use Binary Decisions
Binary Decision:
Bear Trend, or Bear Leg in a TR
Binary Decision:
If Bear Trend, then is it a BO or Channel?
BEAR BO - Need to get short for any reason. Sell at least at market or on a PB

If a Market is going Down - Use Binary Decisions
Binary Decision:
Bear Trend, or Bear Leg in a TR
Binary Decision:
If Bear Trend, then is it a BO or Channel?
BEAR BO - Need to get short for any reason. Sell at least at market or on a PB

Can a Trader Buy in a Bear channel and if yes why?
Yes,
PB to go above BO points(overlap)
PBs need to go high enough to make room for at least a scalp
Only do it if youre an expert
First buys are limit orders, only experts and only if Stairs are present

Bear Channel = Market is Going Down

Bear Channel = Market is Going Down

Whenever a Trader is disappointed with what the market is doing after an entry. It is almost always better to get out with a small profit or Breakeven
Whenever a Trader is disappointed with what the market is doing after an entry. It is almost always better to get out with a small profit or Breakeven
TR - Buy Low Sell High Scalp (BLSHS)

TR - Buy Low Sell High Scalp (BLSHS)

Bull Channels - Broad and Tight
In a Broad Bull Channel the Buy ZONE is middle 3rd and bottom third (bottom half of most recent leg up) of the most recent leg up
- Bulls look to Buy PB into buy zone
- Bulls will buy reversals up
- Bull will buy close of strong Bear Bar(s) betting on its failure
- Trail Stop after a Strong BO to a new high
In a Tight Bull Channel trade it like a BO & Buy for any reason at any time.

Bull Channels - Broad and Tight
In a Broad Bull Channel the Buy ZONE is middle 3rd and bottom third (bottom half of most recent leg up) of the most recent leg up
- Bulls look to Buy PB into buy zone
- Bulls will buy reversals up
- Bull will buy close of strong Bear Bar(s) betting on its failure
- Trail Stop after a Strong BO to a new high
In a Tight Bull Channel trade it like a BO & Buy for any reason at any time.

Bear Channels - Broad and Tight
In a Broad Bear Channel the SELL ZONE is middle 3rd and top third (top half of most recent leg down) of the most recent leg down
- Bears look to Buy PB into buy zone
- Bears will buy reversals down
- Bears will buy close of strong Bull Bar(s) betting on its failure
- Trail Stop after a Strong BO to a new low
In a Tight Bear Channel trade it like a BO & Buy for any reason at any time.

Bear Channels - Broad and Tight
In a Broad Bear Channel the SELL ZONE is middle 3rd and top third (top half of most recent leg down) of the most recent leg down
- Bears look to Buy PB into buy zone
- Bears will buy reversals down
- Bears will buy close of strong Bull Bar(s) betting on its failure
- Trail Stop after a Strong BO to a new low
In a Tight Bear Channel trade it like a BO & Buy for any reason at any time.

Broad Bear Channel - Take Sell Signals, Okay to Buy

Broad Bear Channel - Take Sell Signals, Okay to Buy

Buy and Sell Zone
Sell ZONE is Upper 1/3rd of TR - Bears look to sell in it, or above; 60% probability the market will go down X # of pips
Buy ZONE is Lower 1/3rd of TR - Bulls look to buy in it, or below; 60% probability the market will go up X # of pips

Buy and Sell Zone
Sell ZONE is Upper 1/3rd of TR - Bears look to sell in it, or above; 60% probability the market will go down X # of pips
Buy ZONE is Lower 1/3rd of TR - Bulls look to buy in it, or below; 60% probability the market will go up X # of pips

TR, But the market is still in a Bear Channel

TR, But the market is still in a Bear Channel

What happens if I missed the Best Signal, what do I do?
There is no “best” signal or perfect trade, but there are many good signals every few bars
It Never matters when you begin trading as every part of the cycle offers profitable setups

Every Bar has Big Volume
Traders entering constantly on every time frame. Experienced Traders see reasons to enter at every moment
I can make a profit, as long as I understand where I am in the MARKET CYCLE, and Trade appropriately
Every Bar has Big Volume
Traders entering constantly on every time frame. Experienced Traders see reasons to enter at every moment
I can make a profit, as long as I understand where I am in the MARKET CYCLE, and Trade appropriately
Traders Equation: 40 - 60 Rule

Traders Equation: 40 - 60 Rule

What is the best trading risk - reward trade at a minimum for a Swing Trade?
Swing Trade for a Reward at Least 2x Risk

To take a Low Probability Trade what would I need at a minimum for a positive traders equation?
I need at least 2x Actual Risk for a positive Traders Equation. 2x Initial Risk always results in a positive Traders Equation

When the Probability is High is 1x Risk Good Enough?
(Buying after a Strong BO is High Probability) Yes 1x is good enough risk when Probability is high.

Markets have inertia and tend to continue doing what they’ve been doing
Markets have inertia and tend to continue doing what they’ve been doing
Be Patient - Do not Scalp out EARLY

Be Patient - Do not Scalp out EARLY

When is the only time you should scalp in a Strong Trend?
The only time you should scalp in a strong trend is if you’re able to get back into the trend for another trade if not hold for a swing and do not scalp
What is a reasonable default plan for taking profits?
Take half off at 2x Initial Risk (When you do not know where to take profits)
Take 25% off at 3x Initial Risk
Swing Balance, and Trail the Protective Stop, Exit before Close of the Day(End of Session)

What is a reasonable default plan for taking profits?
Take half off at 2x Initial Risk (When you do not know where to take profits)
Take 25% off at 3x Initial Risk
Swing Balance, and Trail the Protective Stop, Exit before Close of the Day(End of Session)

Exit - If Sell Signal, Stop is Hit, or End of Session

Exit - If Sell Signal, Stop is Hit, or End of Session

After a BO you can Enter Later - on a BO or a PB

After a BO you can Enter Later - on a BO or a PB

It is ok to wait For an Always In sentiment to be clear before entering the market for a trade, What are some Always In confirmations?
Strong BO
Series of consecutive trend Bars
