Accept the politics in trading? A guide to playing the game.
Experienced the following?
Office politics
Corporate politics
Workplace politics
And what advice do you receive?
โPlay the gameโ
Because if you don't, you can negatively impact career advancement and make for an uncomfortable work environment.
A driving force to succeed at trading was wanting to avoid all that. But the further I delved into trading, guess what? Due to market politics, you must also play the game when trading.
You play the game to stay in the game
Otherwise, you'll keep losing until you can no longer play. So I'm going to show you. And the easiest way to do it? Yep, real trading examples:
Jan 4
Relative value underpins price moves. Institutions/market makers do their business at specific prices.
The dash-dot fuchsia line on the chart below is one such level.
Can you see the order circled in blue? The darker 'shading' indicates it's bigger than other orders.
It's no coincidence it's a relative value calculation which is why the market traded there. Notice how the price fulfils the order and then retreats? You can play along with this game, but...
Jan 5
The order must align with a relative value calculation. Because if not the likely outcome is a trap.
The trade below illustrates this:
Large resting order
No relative value calculation
Sets up a short trade opportunity as shown
In the trade above, notice anything about the booked profits? That's right; profits are taken into a relative value calculation. Colour-coded levels make it easy to know one type of calculation from another:
๐๐ฉ๐ฆ ๐ญ๐ข๐ด๐ต ๐ด๐ฉ๐ฐ๐ณ๐ต ๐ต๐ณ๐ข๐ฅ๐ฆ ๐ธ๐ข๐ด ๐ข ๐ต๐ช๐ฏ๐บ ๐ญ๐ฐ๐ด๐ด. ๐ ๐ฉ๐ข๐ท๐ฆ ๐ฎ๐ข๐ฏ๐บ ๐ด๐ค๐ณ๐ข๐ต๐ค๐ฉ๐ฆ๐ด / ๐ญ๐ฐ๐ด๐ช๐ฏ๐จ ๐ต๐ณ๐ข๐ฅ๐ฆ๐ด. ๐๐ต๐ฆ๐ฑ๐ด ๐ต๐ฐ ๐ฌ๐ฆ๐ฆ๐ฑ๐ช๐ฏ๐จ ๐ญ๐ฐ๐ด๐ด๐ฆ๐ด ๐ต๐ช๐ฏ๐บ? ๐'๐ญ๐ญ ๐ญ๐ช๐ฏ๐ฌ ๐ต๐ฐ ๐ข ๐จ๐ถ๐ช๐ฅ๐ฆ ๐ง๐ถ๐ณ๐ต๐ฉ๐ฆ๐ณ ๐ฅ๐ฐ๐ธ๐ฏ:
Jan 3
Very few active traders around because it was the first trading session for 2023. But even when trading for only two hours see the role of relative value?
After the data release, the long trade is framed by the Pre-Pro Lowโข and 0.6806.
Imagine how many traders were caught either:
Trying to short a break of 0.6806
Holding a long beyond the Pre-Pro Lowโข
What the courses/rules/guides say about trading doesn't matter. The politics of trading overrides all of it.
Look:
If it weren't for the guidance and mentoring received trading at a professional firm, I wouldn't know this. But because it's uncommon knowledge, I exploit it. You'd do the same. Right?
When I mentor a trader, we devote our first 1-on-1 session to this topic (and the 2nd and 3rd). Because it's the foundation from which everything else stems.
Further reading: