The edge is NOT “knowing your setups”
The edge IS “knowing the market conditions in which they work”
Market conditions cycle and setups cycle in the same way
To be consistently profitable you need to recognise your setups and the conditions in which they apply
You will be more successful learning to recognise the environment in which a setup works then by simply learning the setup itself
Many traders lose money applying perfectly good strategies in a part of the market cycle not suited to that strategy at that time
For example..
The Tazer technique is used to trade end of wave reversals
If you recognise the market environment that leads to reversals then you will know when to use the tool
If you can’t recognise exhaustion you will force the setup in a momentum break environment and get knocked out of every trade
All market models I build are on a rule of thumb basis
Propositions are generally held to be true
So as each season kicks in, I start testing market behaviour and when conviction kicks in so do the trades
Rules of thumb are more useful in markets then rigid rules
Observe, adapt, adopt, apply
