What books and courses don't cover - the way trading's done

November 25, 2022 Adam Fiske

What set up the first payout?

Sure the u̶n̶d̶e̶r̶ ̶N̶D̶A̶ trade paid

But what was the catalyst?

Here's your play:

The early move-up was a carbon copy of the prior day.

When trading a continuation of that move rewarded you.

But now

There's keen interest in a rinse-and-repeat long trade due to recency bias.

Yet there is a structural difference...

RBNZ rate decision pending = large players (who move markets) will not load up on the long side.

Existing longs booking profits (selling) is likely.

Step 1

We have a catalyst for a move down.
(recency bias long traders being forced to sell at a loss)

Step 2

Wait for the market to confirm the catalyst through a playbook trade.

Step 3
The market aligns with a trade that fails to break a relative value calculation. Not known to most traders provides the edge*. (It's under NDA to protect mentorees' competitive advantage).

*a trade that produces profits over meaningful sample size is said to have edge.

The trade is an extension of the bread and butter playbook 101 trade.

Combining the edge above makes it suited to adding size without increasing risk.

(Not all trades are suited to scale into increased size risk-free)

The trade above completes.

But did the catalyst?

Back to step 2.

Wait for the market to confirm the catalyst through a playbook trade.

This time the market aligns with a different playbook trade. It considers a period when particular traders are active. Also unknown to many participants gives it edge.

And finally

you guessed it:

back to step 2.

The market behaviour aligns with a 3rd playbook trade.

So...
You have an idea about which direction the market may move.

But notice how the market behaviour differed for the same idea?

One idea.

3 different trades.

3 different ways to time entering and exiting the market.

You see the importance of playbook trades? Trades that need certain market behaviours to engage.

Ask yourself:

Of all the trading books and courses on trading you've completed.

Where was the part explaining this is the way?

Where was the material showing you:

first you need a catalyst
and then engaging requires a playbook trade?

You learn playbook trades when you trade at a professional trading firm.

Or you can work with a mentor who can teach you their extensive playbook.

A mentor also helps you create catalysts.

If you love trading but poor results and little progress are painful. A mentor can get you past this.