Here's your guide for:
- Identifying Market Phases
- Maximising Profits
- Creating a Consistent Strategy
Use this guide to:
1 Understand structure, news, and sentiment
2 Create a hypothesis
3 Keep your profits
4 Execute your system
I've put a lot of effort into this and will make more helpful posts.
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Step 1: Identify The Environment
This is the biggest secret to trading less and making more profit
Because your biggest losing streaks come from trading in the wrong environment.
Identifying "no trade zones" lets you focus on high-probability setups.
There are 3 ways to identify the environment:
A) Market Structure
This allows you to find the direction of the trend.
There are only 6;
-Up
-Up volatile
-Sideways
-Sideways volatile
-Down
-Down volatile
B) Market Sentiment
This allows you to understand which narratives are trending.
I use;
-X for general market sentiment
-Group Chats with industry leaders for market pulse
You can start with;
-X and Binance Square for general market sentiment
-TradingView for Macro Analysis
-Fear + Greed Index
C) Market News
This allows you to anticipate:
-Major Volatility Days
-Macro Market Direction
-Key Economic Events
Step 2: Logic
This is your Hypothesis about the market: "I think X will happen because Y"
90% of trading strategies fall into 2 categories:
-I think price will trend
-I think price will revert to the mean
The simpler the better.
Step 3: Risk Management
This includes:
A) Entry
B) Stop Loss
C) Profit Target
D) Risk (Position size)
Limit losses when your hypothesis is wrong and maximize profits if correct.
This framework will help you survive drawdown:
Step 4: Execution/Management
A) Stick to your plan
B) Make changes based on new data
Execution separates the good from the great.
Management requires testing, data, experience, and intuition.
But even with a profitable strategy, traders can still lose money.
Executing your system consistently requires extreme psychological discipline and a regimented lifestyle.
This is a lifelong challenge that even traders with 20+ years of experience face.
Now you have the tools to make your own strategy.
But there's a lot more to trading profitably, and I'll give you a full (free) trading course to learn.
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