Monthly Archives: August 2024

Archive, Retrospective

Sunday Retrospective for August 18

Posted on by Conor Browne

Building Trading Confidence Through Routine and Strategic Decision-Making

• Put/Call Ratio Discussion: Addressed how traders use the put/call ratio to spot market extremes, though it has recently proven unreliable in predicting market behavior.

• Volatility Spike Analysis: Highlighted unusual market behavior during a significant volatility spike, which had minimal long-term impact despite being the third-largest in history.

• Paper Trading and Confidence: Provided guidance on when traders should move from paper trading to live trading, suggesting at least six months of consistent results before transitioning.

• Emphasizing Small Wins: Encouraged traders to focus on capturing small, consistent wins as part of an effective risk management strategy.

• Trend Following and Market Distribution: Stressed the importance of trading with the market trend, explaining how trend-following enhances profitability and captures larger market moves.

• Timid Trading and Aggression: Ernie reflected on his recent timid trading and emphasized the need for taking more aggressive trades when market conditions permit to maximize returns.

Summary

Ernie led a discussion on various topics related to trading strategies and market behavior. The meeting opened with an analysis of the put/call ratio, a tool traditionally used to spot market extremes, though Ernie noted that it has recently been less effective at providing accurate signals, especially during the recent volatility spike.

Ernie reflected on a significant market event: the third-largest volatility spike in history. He noted that despite the dramatic nature of the spike, it had virtually no lasting impact on the market, which he found unusual. This led to further exploration of how market anomalies can sometimes defy expectations.

The discussion transitioned to paper trading, with Ernie advising traders to spend at least six months working on consistent results before moving to live trading. He emphasized the importance of confidence and familiarity with trade execution.

A key takeaway from the meeting was the importance of focusing on small, consistent wins. Ernie encouraged traders to capture these wins to offset losses and ensure profitability. He also stressed the importance of trading with the trend, explaining how this strategy increases the likelihood of capturing significant market moves and aligns with market distribution patterns.

Ernie concluded by reflecting on his own trading behavior, noting that he had been trading too timidly in recent months. He emphasized that traders should take advantage of favorable market conditions by being more aggressive with their position sizes and trade frequency when appropriate, to achieve better returns.

Overall, the session highlighted the importance of developing trading confidence, following the trend, and focusing on small, consistent wins to maintain profitability in the long term.

Archive, Zoom Daily

Daily Meeting for Friday August 16

Posted on by Conor Browne

Mastering Market Reaction and Enhancing Technical Precision

• Market Volatility and Structural Levels: Ernie discussed the market’s reaction to recent economic reports, emphasizing the role of volume profile in identifying structural levels for trade entries.

• Trade Timing and Volatility: Highlighted the importance of timing trades during high volatility periods, particularly during economic report releases.

• Volume Profile as a Core Tool: Emphasized the significance of using volume profile to gauge market behavior and make informed trade decisions, particularly in the absence of traditional pullbacks.

• Technical Tools and Trade Execution: Discussed the introduction of new features in trading platforms, such as variable-width candles in TradingView, and how they can aid in understanding market dynamics.

• Managing Expiration in Futures Contracts: Covered the importance of being aware of futures contract expiration dates and times, particularly for commodities like oil, to avoid unexpected positions or liquidations.

• Continuous Learning and Platform Familiarity: Encouraged traders to deepen their understanding of platform-specific features and continuously refine their trading strategies based on real-time data and new tools.

Summary

Ernie focused on the market’s response to recent economic reports, particularly the CPI and EIA data, and how these events influenced market volatility and structural levels. He emphasized the importance of using volume profile as a core tool to identify key structural elements, which are critical for making informed trade entries, especially in the absence of traditional pullbacks.

Ernie discussed the significance of timing trades during high volatility periods, such as during economic report releases, to maximize trading opportunities. He introduced new features in trading platforms, like variable-width candles in TradingView, which help traders better understand market dynamics by reflecting volatility through candle width.

The meeting also covered the practical aspects of managing futures contracts, particularly the importance of being aware of expiration dates and times to avoid unexpected liquidations. Ernie emphasized the need for continuous learning, encouraging traders to familiarize themselves with platform-specific features and refine their trading strategies based on real-time data and new tools.

Overall, the session reinforced the critical role of volume profile in trade execution, the importance of precise timing in volatile markets, and the need for continuous learning to adapt to evolving market conditions and platform features.

Archive, Zoom Daily

Daily Meeting for Thursday August 15

Posted on by Conor Browne

Developing Strategic Routines and Mental Toughness in Trading

• Market Behavior and Expectations: Ernie discussed the unusual market behavior, noting the absence of typical pullbacks following a sharp move up and the implications for trading strategies.

• Importance of Routine Development: Emphasized the necessity of creating and refining trading routines, encouraging traders to break down the overall process into specific routines for better focus and improvement.

• Volume Profile and Structural Analysis: Highlighted the significance of using volume profile to identify key market levels, particularly in understanding market structures and making informed entry decisions.

• Mental Toughness and Decision-Making: Stressed the importance of developing mental toughness, particularly in making decisive trade entries and managing trades without hesitation or second-guessing.

• Risk Management and Profit-Taking: Discussed strategies for managing risk, including the importance of taking small, consistent profits to maintain overall profitability while minimizing drawdowns.

• Practical Application and Learning: Encouraged participants to review provided documents and apply the concepts discussed, particularly in refining their trading routines and developing a more structured approach.

Summary

Ernie analyzed the recent market behavior, noting the unusual absence of pullbacks following a sharp upward move. He discussed the implications of this behavior for trading strategies and emphasized the importance of being prepared for such market anomalies.

The session focused on the importance of developing and refining trading routines. Ernie encouraged traders to break down their overall trading process into specific routines, such as market structure analysis, trade execution, and profit management. This approach allows for more focused improvement and better results over time.

Ernie highlighted the role of volume profile in identifying key market levels, which is crucial for understanding market structures and making informed trade entries. He also stressed the importance of mental toughness, particularly in making decisive trade entries and managing trades without hesitation or second-guessing.

The discussion included strategies for managing risk, with Ernie advising traders to take small, consistent profits to maintain profitability while minimizing drawdowns. He emphasized that this approach is especially useful for newer traders or those still refining their strategies.

Finally, Ernie encouraged participants to review the documents he provided, which outline key concepts and strategies discussed in the meeting. He stressed the importance of applying these concepts to refine trading routines and develop a more structured approach to trading.

Overall, the session reinforced the need for disciplined trade execution, strategic routine development, and the cultivation of mental toughness to navigate the complexities of the market successfully.

Archive, Zoom Daily

Daily Meeting for Wednesday August 14

Posted on by Conor Browne

Strategic Adjustments and Risk Management in Volatile Markets

• Market Reaction to Economic Data: Discussed the market’s response to the CPI and EIA reports, noting initial volatility and eventual stabilization.

• Oil Market Dynamics: Analyzed the implications of the EIA report showing increased oil reserves and its broader impact on market sentiment.

• Volume Profile Application: Emphasized the importance of using volume profile to identify structural elements and guide trade decisions, especially in volatile conditions.

• Trade Execution and Position Sizing: Shared insights on adjusting trade sizes and position entries based on observed market behavior, with an emphasis on flexibility and risk management.

• Technical Analysis and Pattern Recognition: Highlighted the importance of recognizing technical patterns, such as support and resistance levels, and their impact on trade outcomes.

• Risk Management and Profit Targets: Discussed the importance of setting appropriate profit targets and managing risk effectively, especially in high volatility environments.

Summary

In the daily meeting on August 14th, Ernie focused on the market’s reaction to recent economic data, particularly the CPI and EIA reports. He discussed the initial volatility following these reports and how the market eventually stabilized. The analysis extended to the implications of the EIA report, which showed increased oil reserves, and how this might affect broader market sentiment.

Ernie emphasized the use of volume profile as a crucial tool for identifying key structural elements in the market, which can guide trade decisions during periods of volatility. He discussed the importance of precise trade execution and the need to adjust position sizes based on market behavior. This flexibility in approach helps manage risk more effectively.

The meeting also covered technical analysis and pattern recognition, with Ernie highlighting the significance of identifying support and resistance levels and understanding their impact on trading outcomes. He reinforced the importance of setting appropriate profit targets and managing risk, particularly in high volatility environments.

Overall, the session underscored the need for strategic adjustments, careful risk management, and the effective use of technical analysis tools to navigate volatile markets successfully.

Archive, Zoom Daily

Daily Meeting for Tuesday August 13

Posted on by Conor Browne

Enhancing Precision and Strategy in Trade Execution

• Market Analysis and Expectations: Ernie discussed the market’s current behavior, including its response to inflation numbers and the anticipation of upcoming economic indicators.

• Volume Profile and Structural Levels: Emphasized the importance of using volume profile to identify key structural levels in the market and how these influence trade decisions.

• Trade Execution Timing: Highlighted the significance of precise timing in trade execution, particularly in relation to market pullbacks and low volume nodes.

• Risk Management and Position Sizing: Stressed the importance of maintaining small position sizes during uncertain market conditions to manage risk effectively.

• Technical Tools and Market Signals: Discussed the use of technical tools like the Profit Taker and volume-weighted candles to assess market strength and potential reversals.

• Participant Engagement and Learning: Encouraged participants to actively engage in discussions and continuously refine their trading strategies based on shared insights and market analysis.

Summary

Ernie focused on the current state of the market, discussing its response to recent inflation data and how traders should anticipate upcoming economic indicators. He emphasized the importance of using volume profile to identify key structural levels, which serve as critical points for making informed trade decisions.

Ernie discussed the significance of precise timing in trade execution, particularly when dealing with market pullbacks and navigating low volume nodes. He demonstrated how to use tools like the Profit Taker and volume-weighted candles to assess market strength and potential reversals.

Risk management was a key topic, with Ernie advising traders to maintain small position sizes during uncertain market conditions. He stressed the importance of managing risk effectively to protect against potential losses.

The session also included a strong focus on participant engagement, with Ernie encouraging traders to actively participate in discussions and continuously refine their strategies based on collective insights and detailed market analysis. The meeting concluded with practical advice on enhancing precision in trade execution and strategy development.

Archive, Zoom Daily

Daily Meeting for Monday August 12

Posted on by Conor Browne

Strategic Trade Execution and Market Analysis Amid High Volatility

• Importance of Independent Analysis: Ernie emphasized the necessity for traders to perform their own situational analysis daily to become independent and avoid reliance on external sources.

• Trade Execution and Timing: Discussed the significance of trade timing and the impact of market volatility, especially when choosing entry points during periods of market uncertainty.

• Volume Profile and Structural Analysis: Highlighted the use of volume profile to identify key market levels and structural elements, focusing on how these can guide trade decisions.

• Technical Tools and Calculations: Reviewed the importance of using tools like the butterfly calculator and introduced the stochastic strategy selector for helping traders make decisions when market direction is unclear.

• Risk Management Practices: Stressed the importance of managing risks, particularly when dealing with high volatility, and the need to adjust trade sizes accordingly.

• Continuous Learning and Engagement: Encouraged traders to engage actively, ask questions, and continuously improve their understanding and use of trading tools and strategies.

Summary

Ernie focused on the importance of traders becoming independent by performing their own situational analysis each morning. He emphasized that waiting for others to provide analysis can lead to laziness and hinder a trader’s growth. Ernie demonstrated how to conduct this analysis and stressed the importance of doing it consistently to become self-reliant.

The discussion covered the critical aspects of trade execution and timing, particularly in the context of high market volatility. Ernie explained how using volume profile to identify structural elements in the market can help traders make more informed decisions. He also introduced the stochastic strategy selector, a tool that aids in making trade decisions when market direction is unclear.

Risk management was a key topic, with Ernie advising traders to adjust their trade sizes based on the level of market volatility. He highlighted the importance of managing risk effectively to protect against potential losses during volatile periods.

Ernie encouraged active participation and continuous learning, urging traders to ask questions and share their experiences to enhance their understanding of trading strategies and tools. The session concluded with a focus on the need for precision in trade execution and the strategic use of technical tools to navigate the challenges of the market successfully.

Archive, Retrospective

Sunday Retrospective for August 11

Posted on by Conor Browne

Enhancing Trade Execution and Consistent Profit Management

• Fundamentals of Risk Management: Emphasized the importance of learning to manage drawdowns and maintaining consistent risk control as the foundation of successful trading.

• Routine and Habit Development: Discussed the critical role of developing and refining trading routines, focusing on consistency and continuous improvement.

• Understanding Market Structures: Highlighted the use of volume profile to accurately identify market structures and make informed trading decisions based on actual market trades.

• Profit Management Strategies: Stressed the importance of taking small profits consistently, which contributes to overall profitability and reduces risk exposure.

• Trading Psychology: Addressed the need for mental toughness in trading, emphasizing the discipline required to make decisions under pressure and stick to the trading plan.

• Use of Technical Tools: Encouraged traders to integrate volume profile with other technical tools to enhance decision-making, especially in identifying optimal entry and exit points.

Summary

Ernie focused on the critical aspects of risk management, emphasizing the importance of learning to manage drawdowns and maintaining consistent control over trading risks. He discussed how these fundamentals are essential for long-term success in trading.

The session highlighted the significance of developing and refining trading routines, encouraging participants to focus on consistency and continuous improvement. Ernie stressed that these routines are the backbone of effective trading and should be practiced and perfected over time.

A key part of the discussion was the use of volume profile to understand market structures. Ernie explained that volume profile provides a clear view of actual market trades, making it a more reliable tool for identifying support and resistance levels compared to other methods.

Ernie also discussed profit management strategies, advising traders to focus on consistently taking small profits. This approach not only contributes to overall profitability but also helps in reducing risk exposure. He emphasized that building the habit of taking small profits is crucial for managing trades effectively.

The meeting also addressed the psychological aspects of trading, particularly the need for mental toughness. Ernie emphasized that traders must develop the discipline to make decisions under pressure and adhere to their trading plans, even when the market is challenging.

Finally, Ernie encouraged traders to integrate volume profile with other technical tools to enhance their decision-making process. He suggested that using these tools in combination can help traders identify optimal entry and exit points, leading to better trade execution and outcomes.

Overall, the session reinforced the importance of consistent risk management, disciplined trade execution, and the strategic use of technical tools to navigate the complexities of the market successfully.

Archive, Zoom Daily

Daily Meeting for Friday August 9

Posted on by Conor Browne

Mastering Market Structures and Enhancing Trade Precision

• Challenges with Market Volatility: Discussed the effects of recent market volatility on trading strategies, particularly during periods of unexpected market movements.

• Volume Profile Analysis: Emphasized the importance of using volume profile to identify key market structures, support, and resistance levels, particularly in a volatile market environment.

• Trade Execution Strategies: Highlighted the necessity of precise trade execution, focusing on the correct timing and selection of trades based on market indicators.

• Use of Technical Tools: Provided insights into different technical tools and their application, such as the VRVP chart in Thinkorswim, and discussed its limitations compared to other platforms.

• Risk Management Approaches: Stressed the importance of managing risk effectively, particularly in managing positions that can quickly become unprofitable in a volatile market.

• Continuous Learning and Adaptation: Encouraged traders to continuously refine their understanding of market behavior and technical analysis, emphasizing the importance of adapting strategies based on evolving market conditions.

Summary

Ernie focused on the challenges posed by recent market volatility, discussing how these conditions have impacted trading strategies. The session highlighted the importance of volume profile analysis in identifying key market structures, support, and resistance levels, which are crucial for informed trade decisions, especially in a volatile market environment.

Ernie emphasized the necessity of precise trade execution, discussing the importance of timing and trade selection based on market indicators. The conversation included a detailed comparison of technical tools, particularly the VRVP chart in Thinkorswim, and discussed its limitations compared to other platforms.

Risk management was another key topic, with Ernie stressing the importance of managing positions effectively to avoid significant losses, especially during periods of high market volatility. He advised traders on the best practices for adjusting their strategies to accommodate these challenging conditions.

Finally, Ernie encouraged participants to engage in continuous learning and adaptation, emphasizing that understanding market behavior and refining technical analysis skills are essential for long-term success in trading. He reiterated the importance of staying disciplined and adjusting strategies based on the evolving market landscape.

Archive, Zoom Daily

Daily Meeting for Thursday August 8

Posted on by Conor Browne

Strategic Use of Volume Profile and Trade Adjustments

• Market Reaction Analysis: Discussed the market’s response to a positive jobs report and skepticism around the reported numbers, emphasizing the importance of independent analysis.

• Volume Profile and Structural Elements: Detailed the use of volume profile to identify key market levels, focusing on the significance of structural elements where volume shifts quickly.

• Trade Execution and Precision: Highlighted the importance of precise trade execution based on volume profile analysis, stressing the need to pay attention to market reactions at structural elements.

• Adjusting to Market Conditions: Emphasized the necessity of adjusting strategies based on current market conditions, particularly when using volume profile to determine support and resistance levels.

• Technical Analysis Tools: Provided a comparison between different charting time frames (daily vs. four-hour charts) to illustrate the impact on volume profile detail and precision.

• Participant Engagement and Learning: Encouraged traders to continuously refine their understanding of volume profile and its application to improve trade execution and outcomes.

Summary

Ernie led a detailed discussion on the market’s reaction to a recent jobs report, expressing skepticism about the validity of the reported numbers and the media’s interpretation. He emphasized the importance of conducting independent analysis rather than relying on mainstream explanations for market movements.

The meeting focused heavily on the strategic use of volume profile to identify key market levels and structural elements where volume shifts significantly. Ernie illustrated how these structural elements serve as critical points for making trade decisions, particularly in identifying areas of support and resistance. He stressed the importance of precise trade execution based on this analysis, advising traders to pay close attention to market reactions at these critical levels.

Ernie also discussed the necessity of adjusting strategies based on real-time market conditions. He provided a comparison between daily and four-hour charts to demonstrate the differences in volume profile detail, explaining how a four-hour chart might offer better precision in identifying structural elements.

Throughout the session, Ernie encouraged participants to deepen their understanding of volume profile and to continuously refine their trading strategies. He emphasized that developing a strong grasp of these tools is essential for improving trade execution and achieving consistent success in the market.

Archive, Zoom Daily

Daily Meeting for Wednesday August 7

Posted on by Conor Browne

Developing Mental Toughness and Strategic Trade Execution

• Mental Toughness in Trading: Emphasized the importance of building mental toughness to consistently follow trading plans and avoid second-guessing.

• Precision in Trade Execution: Discussed the necessity of making decisions based on the market’s indicators rather than personal instincts or external opinions.

• Volume Profile Utilization: Highlighted the value of using volume profile to determine key market levels and when to refrain from entering trades if conditions aren’t favorable.

• Patience and Discipline: Encouraged traders to practice patience, recognizing that not every day will present ideal trading opportunities.

• Strategic Planning: Reinforced the importance of having a well-defined strategy and the discipline to follow it without deviation, even in the face of market fluctuations.

• Practical Examples and Tools: Provided practical guidance on using tools like the Profit Taker and shared insights on adjusting strategies based on market conditions.

Summary

Ernie focused on the critical role of mental toughness in successful trading. He emphasized that traders must develop the discipline to stick to their trading plans and avoid second-guessing themselves, which can lead to inconsistent results. Ernie pointed out that making decisions based on market indicators, rather than personal instincts or external opinions, is crucial for maintaining consistency in trading.

The discussion also highlighted the importance of volume profile analysis in identifying key market levels. Ernie advised traders to use this tool to determine when to enter or refrain from trades, emphasizing that patience is essential—recognizing that not every day will offer ideal trading opportunities.

Ernie reinforced the significance of having a well-defined strategy and the discipline to adhere to it, even when market conditions are challenging. He provided practical examples of how to use tools like the Profit Taker to manage trades effectively and discussed how to adjust strategies based on real-time market conditions.

Overall, the session stressed the need for mental toughness, disciplined trade execution, and strategic patience to navigate the complexities of the market successfully.