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Language of Markets


 

Hello, Trader

April 11, 2020
The heightened volatility we're seeing today underscores the imperative of grounding ourselves in simple and objective methods for mapping markets and managing risk. This was our focus this month, answering the call to action arising out of the loss of balance that inevitably comes with rapid, unpredictable change, which is then typically followed by the abandonment of good trading practices. When we lose our center this way, we begin to draw information from external cues instead of from grounded objectivity—think about the last time your trade decision was guided by fear. But there's no reason why we can't dispassionately follow swings and make trade decisions based on facts. In Mapping the E-Mini S&P Weekly, we demonstrate how a volatile market—at its peak of volatility—was easily understood using swings and market structure. Since the preservation of capital is the first rule of a stable trading practice, in Foundations of Trading, Part 6: Risk Management, we give guidelines for creating a sound risk management plan, looking at self-management as well as money management. Finally, in Adjusting Stops for Volatility, we teach a simple method for calculating stops no matter the degree of volatility. Change is inherent in markets and there is always volatility. This is, plain and simple, a part of trading. 
 

Insights

Meditations on the joys and trials of trading
The Trader's Dilemma
 

It's humbling, knowing that we have absolutely no control over markets. We know this. And yet, how often do we find ourselves trying to impose our will, making up reality rather than experiencing it, resorting to wishing, wanting or hoping that price go our way. This is the trader's dilemma, our crazy. This is why I often get asked the question, why is trading so difficult? To which I reply, trading is only difficult when we argue with what price is doing. To which I add, rather than fixate on what we can never control, we can focus instead on cultivating our relationship with not knowing. We do this by putting ourselves aside, letting go of all agenda and starting with the presumption that we don't know and thereby setting the mindset for reaching out to see what's there, letting price teach us as we follow rather than lead. This opens the space for discovery, for real listening and it allows every trade to be a new creation. This is my practice, cultivating my relationship with the discomfort of not knowing. It's how my best trades are the ones that surprise me. They have nothing to do with me or my will.   

—Shane Blankenship

Spotlighted Posts

Foundations of Trading Part 6: Risk Management

March 10, 2020

The only control we have is of ourselves.
Adjusting Stops for Volatility
March 17, 2020

Stops must change with volatility. 
Mapping the E-Mini S&P Weekly
March 20, 2020

Trade Them, not your reactions to them. 

 
Following Live
THEORY into PRACTICE
April 2020
Here, every month, we feature a futures and currency market to follow and then review in the following month. This is where we take theory and ground it in practice. This month we're reviewing March's NZD/USD and E-Mini Nasdaq futures and will map fresh, the EUR/USD and E-Mini Dow Futures.

Map, follow, then join the flow

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Past Newsletters 

March 2020
February 2020
January 2020

 
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