Why trading precision solves your reactive trading tendencies

No is normal

No, this time your trade won't work.

No, the price isn't going to continue going your way.

No, just because you were right moments ago, it’s no longer the case.

And until you:

• Believe this at a deep level, and.

• Arm yourself with the skills to make pinpoint entries, despite these 'No's,

You'll forever be an emotional ticking time bomb, with reactional trades ready to explode.

Now keep reading to find out why it happens and how to overcome it—with real trading from this week to demonstrate.

While my edges are not made public, I'll make one exception and share one of the most significant:

Outlasting the competition. But what does it mean?

To illustrate: What happens at the start of a marathon?

Everyone is running at roughly the same pace. Even the casual runner can keep pace with a world title-holding marathon runner in the early phase of the race.

But over time, the strongest athletes break away from the pack. And you'll see the same behaviours in the market.

Why?

You know the market functions to take money from the pack to pass to the strongest traders.

But it's not something the pack does by choice. The market needs to intervene to force their hand, right?

During this intervention, the best-intentioned traders fall victim to their lack of market understanding and skill.

You'll see real trading to demonstrate this in a minute. But first, remember what the best trader of our time, Jim Simons, said about trading?

"We don't want to predict price, but we want to predict when other market participants are going to do something."

Jim Simons is referring to game theory. 

I bolded the word "game" because, unlike a regular marathon, the separation of the leaders from the pack is anything but regular when it comes to trading.

It can happen sooner or later, for longer or for shorter, or partially or completely—that's the nature of a competitive game.

And you never know beforehand what it is going to be like 'this time'.

This shows why it's vital to your trading success to know how—using a swimming term—to 'tread water'. Trades that don't take you forward but don't sink you either.

To enter trades that go your way yet take the money that's available before the trade fails to continue, as if the trade worked 'kind of'.

And to know when you can enter and use the market's money to add to your position and take more out of the market on the rare occasion this opportunity occurs.

And to rinse and repeat.

You'll see examples of all of these scenarios demonstrated below. 

Tuesday's trading:

Eight trades were made between midday and six in the evening. With an hour spent in the planning stage before trading—this is a typical trading day.

The best plans allow you to double, triple, and quadruple dip—but only if you have the skills to enter and exit with precision—to ensure you turn the 'No's' we covered earlier into opportunities.  

With the exception of one long scalp, all trades were acting out the same daily game plan—trade short between 0.6760 and 0.6747. 

Excerpt from Friday's trading Below you see what treading water looks like.

Neither going forward nor backwards.

This is the essence of outlasting the competition.

You don't know when, but eventually, the trade that pays presents itself.

But you must be trading to take advantage—regardless of how long you spend treading water beforehand.  Make sense?

Yet because treading water trading is challenging, while you might not see movement in your account balance, it advances your skills.

What happens next?

Treading water trading prepares you to extract maximum payment from the market when the trade that pays comes. It makes you a much better trader.

See treading water: Blue arrows are buys, and pink arrows are exits.