Language of Markets


Hello, Trader

November-December 2020
A simple frame can take the intensity out of reading markets. I do this in Gap on the Left, where the gap becomes a simple visual for reading the flow of markets. This kind of subtraction keeps us from doing too much all at once and helps us find that simple, relaxed space. In my second blog, Following Swings Into the Gap on the Left, I add market structure to the simple visual, the gap on the left, and bring in a little more precision to our read of price flow. In The Swap, a Simple Frame for Markets, I show that gaps aren't the only simple visual. The swap area of swings is just as powerful a visual tool since it's often what produces the gap. These are just a sampling of simple and focused approaches to mapping that keep us from being overwhelmed and in doing so, render us more functional traders. 

In trading, one of the few things over which we have control is in defining our risk. In, Stops That Adapt With Market Volatility, I show how to calculate stops using swings and Average True Range (ATR). If you understand stops you will also understand entries.

Happy New Year! Thank you for being a part of Language of Markets. 


Meditations on the joys and trials of trading

Trading Coordination
A student wrote to me the other day to tell me about his most recent bit of learning. He had just executed a beautiful trade with minimal effort and this surprised him. "Holy cow! I'm coordinated! I worked without thinking, drawing simply, and seeing what I needed to see. All of my training seemed to have coalesced into one fluid action. Wow, what was that?" 

The coordination that this student speaks of is a beautiful example of the connection that occurs between the physical, feeling-sense of trading markets and the intellect. As our intellect reaches to master the manifold components of trading—mapping price action, outlining market structure, and trade execution—our feeling-sense puts it all together.  Although trading may not seem intuitively physical, it is. Think about the first time you learned to ride a bike, that moment that you first let go, when the millions of impulses that were firing all at once manifest into one sure feeling. 

The unpracticed trader often has the expectation of mastering everything all at once while also expecting to execute brilliantly. This typically leads to frustration and misdirected action. That's because you can't will coordination. You can only invite it. Practice and application is one way to do this. Pick a focused practice, choosing one thing only, and work on it exclusively for a period of time. This could be learning everything about a particular market structure in all its various contexts or focusing on one of the three types of trades and all of its iterations. 

Over time, your learning will be synthesized. You will become more fluid and capable. You'll know you're learning when you've rendered the complex simple.  
—Shane Blankenship

Spotlighted Posts

The Gap on the Left

November 13, 2020
A simple visual for reading and trading price.

Following Swings Into the Gap on the Left

November 16, 2020
Combining gaps and swings. 

The Swap, a Simple Frame for Markets

November 25, 2020
Where buyers and sellers swap. 


Stops That Adapt With Market Volatility

December 30, 2020
Take control over what you have control. 

Keep in mind that when I use the word "follow" I'm not just talking about trailing along behind a market. The word is describing an experience of setting yourself aside and learning from what they are doing. This month we will follow Soybean futures which have been running up smoothly and USD/CAD which has been running down smoothly.

Map, follow, then join the flow

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Past Newsletter

September-October 2020
July-August 2020
June 2020

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