Categories
trading

Trading Workflows Swing Trading

Mastery

I’ve listened to dozens of podcast from top traders around the world and all the top-traders have 1 thing in common, they are masters of a particular trading-system. They are specialists, not generalist. They trade under very specific conditions. This is incredible useful information because it allows you to understand how they deal with the emotions that comes with trading big sizes. Trading big positions is no joke, thousands of dollars are made or lost every second. Some traders remain rational and unshaken, some freeze and capitulate to their emotions.

I think their confidence comes from repetition and trading the same system over and over again and expecting the same results. Confidence is important to scale your position-size. Every time you adds zero’s to your notional value (total position-size) your wins and losses are amplified.


Personality

Personality ? Analyst types do well in the markets and analyst types like INTP, INTJ make up 1-2% of the population. I know large portion of the top traders on bitmex have a background in either Engineering or Software-development. A field dominated by logicians, architects…. logic and rational reasoning prevail in the markets and the markets aren’t random. There is a method to the madness.


Foundation (The core)

Realistically speaking, to become a consistently profitable trader will take months or even years. Youtube ,instagram, twitter traders make it look easy just trade with ”indicators”.. but they are most likely phonies trying to sell you a trading course. There were a few good altruistic Samaritans like white-wolf-trader on youtube, giving people free solid knowledge about price action, candle-closes swing failure patterns, liquidity-grabs. I think, he removed the videos because the knowledge was effective. This market is zero-sum and we need losers to pay for our wins.

Remember that ALL Indicators are derived from price-action and candle Open-Close-High and Lows anyone who is selling you a trading course that revolves around indicators is telling me that he doesn’t really understand the importance of pure price-action. (inside bars, bump and runs, outside bars etc) Therefore, I highly doubt that this person who is selling you course, actually makes money in the markets. Why even sell courses when you can make potentially $1k-$5k day just trading futures. Caught few of these ”salesman” selling signals before the candle closed then wonder why their indicator isn’t reliable. Just basic shit like this, tells me you’re faking the funk. Signals often change prior to candle-close, this is called repainting, common knowledge.

Munehisa Homma invented Japanese Candlestick charting 400 years ago in Japan, we still use his system today and they work.

Start with price-action as your foundation. al brooks bar by bar is a good book.

Courtesy of scott-eaton.com Your foundation should be PriceAction + Japanese CandleStick Charting. A trader who lacks knowledge and experience in both disciplines… is like a sculptor who skipped his anatomy classes, his proportions and ratios will be off.

The importance of CandleStick Charting


Decision Making

The following topics are very board and books can be written about them. Smart money orderflow (how institutions trade), risk-management, price-action. You should buy books about them and read them.

Funding rate + Open Interest

There is a debate whether funding-rates forecast dumps or pumps. When open-interest is high and the funding-rate is high (above 0.1%), The probability of shorts or longs covering their position is high, period. Hence, why I always take partial or full profit and so should you. If shit goes down, high open-interest and slippage can take a large chunk of your gains. The ADL auto-deleveraging system on bybit and bitmex prioritize liquidations before marketstops. There also added risk that Bitmex will go offline ”server problems” when liquidity runs dry, instead of taking liquidity from the fucking insurance fund bitmex goes down and blames it on DDOS attacks.


CME GAPS

I think CME gaps are self-fulling prophecy. More than 90% of the gaps get filled, when they get filled is another question. The probability of a gap-fill is HIGH. Look under stocks for the ticker BTC1! to see the CME chart and count how many times gaps got filled.


CME Monthly Closes

I am inactive, 12-24-hours before the CME Monthly Close. I only trade the hours after the Monthly Close. It’s just a safety pre-caution. I fear some rogue traders could be banging the close. CME futures expire every last friday of the month.


Orderflow

Mainly used for scalping…

https://tensorcharts.com includes features like footprint data, volume delta’s, cumulative volume delta’s, honestly I don’t know it can be used together to for forming a strategy. I still haven’t invested the time to learn this, neither will I. Spoofing is illegal but this happens every minute in the cryptospace, I don’t see the point of scalping with orderflow when most of the orders are just bait and pulled within split seconds. Happy to be proven wrong. Comment section down below.

Exocharts

https://exocharts.com Honestly, I don’t see the added benefit of using this. All I need to know is POC, VAH, VAL intraday or composite and you get that data from tradingview (pro)

I am happy to be proven wrong, this seems unnecessary complicated. Comment section is down below

Daily Close

Expect above average volume/momentum during dailyweekly closes. Especially with bullish/bearish engulfing closes above/beneath prior bars. When the daily closes in Europe, the daily opens in Asia. Study price-action to take advantage of the daily-weekly closes. They are money-makers.

R multiple

You cannot be profitable long-term without understanding R Multiple,  R multiple represents the dollar amount that you risked for each trade. Search for edgewonk math cheat-sheet to plan your campaign. Study R-multiple/win-rate.

Hedge

Always use some sort of hedge. Bitmex is often misunderstood as a trading platform, it’s not. It’s actually a hedging platform for semi-professional traders.

https://www.investopedia.com/terms/s/short_hedge.asp

bookmark and study it.

Scaled orders

Scaled orders are used to average out your entry price at key support and resistance levels. It’s also known as Dollar Cost Averaging DCA for short. All professional traders scale in their orders to get the best price. To do it like a boss, you need 3 things wide-spreads, very high scale coefficient, and capital management skills.

Use wide-spreads and very high scale coefficient if you’re unsure. I generally have a idea where support ”might” be, when I scale in buy-orders, I only use 25% of my entire trading capital so I leave enough ”wiggle” room in case I need to average down more and I also use wide spreads with very high scale coefficient. High scale coefficient is important so your averaged out entry price keeps up with the mark-price.

Line-charts

Candle closes on higher-time frames are very important, they often signify important Support –Resistance Levels.

Linecharts provide clarity. Line-charts ignore wicks (shadows) and only plot closing prices of the candle. Line charts allow you to see Support And resistance levels clearly.

candle vs line charts

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