In a crude awakening I talk about one setup type. Well that setup doesn’t work in all market environments. This article will document this using a simple 5 minute chart. The raw stats will then be filtered to only taking trades in the right market environment, i.e with trend and the same stats reproduced. This will be accurate enough for our purpose however it assumes we take every trade. This will not consider the pace of the tape which is a critical component but is a start.
Market condition is one of three things – uptrend, downtrend or consolidation.
The trend definition and future strength is defined from Lance Beggs Works and Price action course.
Above is the mental checklist we go through for a trade. We define the structure placing our framework of Support and Resistance and then define the trend.
Right now from the 30 min chart we can see we are in a consolidation and downtrend on a smaller timeframe chart.
We will get to the point where we have a checklist to maintain situational awareness which asks – what is the market condition and what trades are available to us right now within this market condition (context). Like lance does use a buzzer every 5-10 minutes to update this. Doing this should provide he means to only take the highest probability trades with a positive risk reward. We are aiming for 70% winners with a 2-1 Reward to Risk ratio. At least 10 trades per day. This should allow us to top the leaderboard frequently.
30 Min Trends
Below is a 30 Min Chart showing breakouts into trend that happened over 7 trading Days. There were 16 instances which is over 2 major trends a day that could have been captured.
The Market condition went from Consolidation to trend in that Timeframe.
That also Means that prior to those breakouts we had a consolidation which meant we should not be taking trend trades but playing consolidation trades.
