From crowded to uncrowded trading, your first step to being unique [Video]

Many people try to solve the wrong problem.

They think they have: 

• A psychological problem.

• A patience problem.

• A discipline problem.

But if you're more disciplined working on how most people trade, you're more consistent in achieving poor performance. 

You see:

Above are consequences of an incomplete understanding of the game, sound expertise and refined execution.

So let's start with understanding the game

"Having worked with many traders and trading firms over the years--and especially having participated in the recruitment of traders at those firms--I can say with confidence that distinctively successful traders view markets in distinctively unique ways." Dr Brett Steenbarger

Why is that?

Because trading's a competition in which the overwhelming majority lose. But...

You give yourself a real chance when:

1. You look where the competition isn't looking, or.

2. You look at what the competition is watching through a different lens.

Do this and you shift to unique.

Example to illustrate using AUD/USD

For context:

• upside moves occurred each previous day this week.

• reversion to downside during HKE lunch a thing.

• "hole" in value to the upside existed.

• *prior day demonstrated greater internal strength over other days.

*from game planning notes: "less flashing on the DOM, didn't need to grab profits off the table quickly before they vanished, sloppy long entries not penalised". Conclusion: internal strength but not evidenced by price moving up. But most are unaware of the last two points. So something unique was discovered!

But how do you turn it into a trade idea?

If internal strength continues but people are not aware of it - they'll keep entering into short trades.
Price could ultimately rip to the upside to force the short sellers to cover - their buying fuelling a move upwards.

But to force a short covering move, the time to execute is when:

• liquidity is down (HKE lunch).

• traders are expecting reversion.

Problem?

• How will the idea's integrity be maintained without giving away the game?

• What will this look like in the hours prior?

Solution

*from the game planning notes: "Likely have to outlast the competition as starting point. Hole in value above relative value after an already strong move up. Shorts need time to gain confidence to initiate. Longs need be irritated, causing them to cover and/or reverse."

Here's what that looks like on a chart. You can see why short sellers are attracted to this market. Right?

How did it play out? You'll see in a minute.

First?

Question: What's a problem behaviour people aren't aware of?
Answer: How often have you heard people say "I knew it was going to do that"?
But why's it a problem? Well...
How do you monetise that? Agree?

You see:

Your idea isn't a trade.
You still need a mechanism to monetise it. Make sense?

The wrong way.

You see trade executions on a chart.
You conclude the trader was trading chart price action. Right?

But that's not the case for unique trading.

What do you do? You use a multiple-evidence approach. But rather than speak gobbledygook here's a professional trading setup using a multiple-evidence approach to be unique.

See all the different windows?
You combine to uncover multiple evidence points.
Imagine it as you having many ducks in a row.
Dont't have all your ducks? No trade!

And trading the idea?
You can see how monetising it looks on a chart bearing in mind many points of evidence were combined for each execution.

Watch the competition through a different lens

There's a correlation between how many unique opportunities you uncover and your knowledge of the game.

No giving it away before hand...
Watch catching out the competiton below.