How to prep a trend line entry
Checking one's ego at the door is the most useful preset to a successful low-risk entry point.
This means a consistent flow of updating one's supply and demand zone lines in a preset time sequence for each time frame independent of one's own opinion but merely following the market cue with the awareness that
formation entries are always raw at the beginning when you only have two spots of reference to draw a line and get more and more precise over time when you get more data points to adjust lines.
We mention formation entries since, statistically, triangles, flags, and wedges have a much larger edge if timed well over horizontal price zones.
Price lines are negligible since all observe them, and the market does not care about price enough for a significant edge value. As such, we spend much more effort identifying directional low-risk entry points stacked with the ebauty principle and timed with self-backadn forward-tested statistical values.
That being said, various trading instruments and their various time frames have different statistical values for the various trading patterns in regards to their highest likely apex in time for possible breakout and, as such, need to be back and forward-tested
(we do not trade breakouts, but rather high likely lowest risk fades entry points within the formation.
Some of the most important rules we obey regarding drawing trendlines are:
Beauty principle (a harmonious representation )
wick or bodies as touchpoints
Maximizing touchpoints once more than 3 data points are comprising a line (this overrules the wicks or bodies rule at this time)
cloned lines(this ensures grid time lines as an edge to be integrated)
While stacking odds like this in the subcategories, the more critical part is when TA price patterns are meaningful in relevance to the markets (inter-market relationships, time of day, price, range, volume)
This category is superseded by the actual execution method process block that syncs with the daily call.
This refers to a transparent filter system of unmistakable instructions of what to do at what precise time.
One of my process blocks works as follows:
If you have mastered another field, transfer principles to ensure consistent results.
For example:
When watching the following instructional video about mounting an item to a wall, you will find a similar process sequence in trading:
First, you see the Handyman aligning his prepped toolset for the job, which implies a planned structure of what to do when and with the various tools needed for each of the steps.
In our case, as traders, it is the toolbox that results from our daily call.
"what not to do" = leave all the tools for long entries at home if you have a daily call of a short trend day...
Then you see the guy engaging in a measuring sequence
with multiple steps like adjusting trendlines and clones, flags and pendants, triangles, and more
Marking the wall is like marking a possible upcoming low-risk trade entry in trading on a trendline.
Drilling the hole is like pressing the button to execute a trade entry.
Mounting the object reflects the various steps for quad exits.
Language is also critical with these instruction blocks; it should be emotionally neutral, short to the point, and easily understood, as in this video example.
When I used this method to get limiting execution beliefs out of my head, I used tool pictures instead of arrows on my charts for entries and literally hung up a picture in my mind rather than putting money at risk.
It would help if you changed the representation of this trading video game.
Representation is psychology.
This is just one brief example of how your process block can be shaped into an applicable sequence form that provides the brain with simplified instruction. This helps the brain not fall prey to reactionary or intuitive behavior patterns that typical readers operate from and create consistent losing chains.
Take your metaphors seriously and build visual toolsets like a screwdriver with green anchors for long trades and a red hammer with nails for presetting up shorts.
Predetermine your position size, what hours you trade, and rules when you quit, each reflected within the metaphor tools.
It might sound a bit trivial here, but trust me, this can help solve the most severe repeated rule violations, such as running stops, FOMO trading, revenge trading, overtrading, class B trading, blue car syndrome trading, etc.
It helps if you pick your process picture metaphor from a field you either mastered or are extremely excited about, ideally with strong characters like sports superstars and others that you can place in assistant roles to feel supported and within a team of champions.
Be creative and play around with this methodology. You'll be surprised how effective such clear mental simplifications for process instructions can not only help break unwated patterns but also lead you more effortlessly through the working day once scheduled and refined.
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