Context and Learning To Change With Change

BATS:RNG   Ringcentral, Inc.
One of the hardest things for traders, or anyone for that matter, is to adapt to change. Mostly we get stuck when things change, which makes trading difficult since the very nature of markets is change. This is where the cliché 'going with the flow' originates, but simply understanding the cliché isn't enough; we must internalize and practice it and get it in our bones.

In this post, I will outline a trade plan for RNG. This is a part of our '30 Planned Trades' series, where we plan every aspect of the trade ahead of time and then execute what we have planned.

One aspect of a trade plan is the method or setup. Setups don’t happen in a vacuum, there is a context that determines the meaning of the content. I’m going to approach context very simply here as the thing that decides if the market is going up or down.

I often read things about how I should follow the trend or go with the flow or don’t fight the market, but exactly what trend or flow should I follow? It’s too abstract, so I’m going to fix a cycle to follow and learn to let go and change when it changes.

In the video, I show the basics of a simple practice you can try, using a rolling 100-bar cycle to determine if we are looking for long setups, short setups, or in a transitional or neutral phase. I not only want to be precise and consistent in my Trade Plans, I want to be consistent in my methods.

By adhering to a fixed cycle and adapting with changes, I avoid the need to guess or predict market directions, maintaining balance in my approach. Think about this: If you charge your mind with the impossible task of predicting a market when markets are unpredictable, you will end up a nervous wreck and then wonder why your trading is so emotional.

I encourage you to try this practice. Since it keeps you from constantly looking to the left of the chart or at higher time frames for more information, it will likely push you out of your comfort zone into the unknown, which is a good start.

Trade active:
Trade entered according to plan.
Trade closed: stop reached:
Trade stopped according to plan.

Method, Management, and Mindset
Learning through consistency and discipline

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