HOW TO PREPARE FOR A CHANGE IN MARKET CONDITIONS

in this videos we’re going to look at preparing for a change in market conditions so if

the market conditions change how can you be prepared

so you know exactly what you’re going to do you’re not caught wrong footed stay tuned

hey traders welcome to you thank you for joining me alright so this is a follow-up from a previous video i did we talked about changing market conditions and actually it’s a question um from one of our mastermind members i thought it’s a great opportunity to do a video about it and kind of keep it

loose to help some of you guys who are not in in the program but

you know this is the kind of thing that you don’t think about when things are going well or if you’re focused on one particular strategy or method you don’t think hey you know what things could change dramatically

and you know one thing i mentioned in the video is it really really pays to be prepared for when conditions change because we can have a setup or strategic works very very well like at the moment guys for example

you know i’m filming this and where are we mid july 2020

um you know tech is tech stocks are just pushing hard

and so the strategy of buying tech on dips and kind of a strategy that i’ve shared

with that exact rules and triggers and filters

in the price action program you know it’s working well but we don’t know when it’s going to stop working you know so we milk it for as much as we can we try to extract as much out of the market as we can

and then when conditions change we pivot and we don’t stubbornly try to do that a mistake i hold my hands up to guys you know when i first started i had a strategy was working very very well very very well market conditions changed and i just didn’t know what to do i didn’t know what to do i was wrong-footed i kind of tried it a little bit more

um you know when this i just was kind of lost and went now what you know i feel like i’d found my edge and i was making money and my decision-making process was good and my discipline was good but now the strategy wasn’t working so i had to reinvent the strategy and you’re learning from that and recognizing actually

being a little bit prepared for changing conditions

you know not taking your focus too much away from what’s working now but being prepared and saying you know what how do we number one spot the conditions are changing number two

what can we start to do if they do change now listen

don’t confuse changing conditions with normal market moves

like for example you know let’s say we’re in an uptrend aggressive uptrend and we get a heavy down day that’s not changing conditions that’s just normal market moves guys we might not have had it for a you know kind of a 20-day period or 10-day period but it’s still you know normal moves what a changing conditions would be is from going from you know aggressive bit aggressive bid to you know just stagnating and doing nothing or you know very very volatile or very very quiet kind of in the last video i did where we talked about this you know i’m going to get some more illustrations of what you might see on a child anyway the first thing to do is to scroll back and see what the different conditions are so in the market you’re trading so if you’re trading forex or trading currency trading indices whatever scroll back and just see i know what they look like visually because you know if you’re a new trader as well you’ve not been exposed to it and

why would you have been if you just started trading in relatively recently you’ve not seen different market styles where you know we had really narrow ranges it was very hard we’ve had very extreme ranges and stuff so

you know you you go back and just see exactly you know what it looked like and then you kind of study the move sites you start to study the themes you know and by themes i mean you know do we have a three-day rally and a one-day pullback you know do we have breaks to highs out of the range

that tend to fake do we have you know really aggressive down moves really aggressive up moves and then stagnation you know is there a theme there what’s the average true range just studying and just

getting a feel for what’s happened in those conditions

and a good example would be to go to a quiet condition so you know reasonably active

to how okay what happens when we start to contract in volatility when we start to contract in range

how does that play out well actually you know we for example

we very rarely get more than a two-day move in one direction and then we retrace and so you can start to then build a strategy around that because you start to note down set up ideas great example just then okay in a quiet condition range-bound market we tend to get you know two-day move

and then it just peters out and so maybe maybe it’s a setup or strategy that’s either

you know looking for the exhaustion on the third day or end of the second day or jumping on the ignition on the first day so you start to think rather than perhaps in the current conditions you might say you know what we get a two-day move the third day is a buy day because we’re gonna get another five day move you might think okay we’ll actually flip on its head and look for the reversal on the short so

different ways of thinking about it the fourth thing is research

the type of trades setups from books or from videos and they’ve got a couple in the channel as well guys we’ll talk about setups for you know mean reversion and bear market and there’s a few um you know different courses and stuff that you can do but just start to think about you know okay if we do go into a quiet environment i want to be trading mean reversion what’s a good mean reversion strategy what’s a good indicator to help guide me with mean reversion what’s a good strategy in high volatile conditions what’s a good strategy in a choppy market a low volume market and and starting to use those you know let someone else don’t reinvent the wheel

you know steal that for one of a better word and then

reframe it and re-wrap it and readjust it to suit your style

and the hours you can commit and all the time frames and etc so

that’s one way of kind of doing it once you’ve figured out what you’re looking at

and the fifth thing is it’s kind of slightly different approaches rather than changing strategy dramatically so your strategy might be you know aggressively buying pullbacks in a strong trending market works perfectly and you say well actually no i’m going to have to now sell exhaustion moves by exhaustion moves within a range completely different strategy completely different skill set you know my scaling and stuff you might say okay well okay which markets

may well exhibit the tendencies from the market that i’ve been trading so if you’ve been trading aggressively buying pullbacks you’re like okay well maybe i can’t trade this index that i’ve been trading successfully but maybe that will work well in oil or in gold or in a currency pair

because they might move out of sync with each other so when

equities go quiet maybe commodities go on fire

maybe currencies start moving so rather than just focus on the one market another option a kind of fifth option is to think which markets might be a viable switch or something that happened to me when i was trading very very aggressively london stock exchange shares my switch was over to futures because just the volatility was contracting the specific sector i was trading went quiet uh you know the edge went and so okay why don’t i move over something that’s equally as aggressive and it is moving you know a decent amount i’ve got the same kind of tape reading skills that i was using uh almost on those shares on the level two

uh on the futures market and then you so you kind of

you know mesh together some of the skill sets you’ve got you change markets but you’re still using a

similar type of strategy rather than sticking with the same market but flipping the strategy on its head so there’s a couple of kind of ways to look at it but it definitely pays guys to just just be thinking about

you know how would you trade that environment i’m not saying this should be the forefront of your mind no you know for front of mind is to extract as much as you can from the market manage the rest do all the good things as well while the conditions are there and while it’s working for you but once you’ve kind of got that nailed in allocating a little bit of time a week just to think about okay if i started trading reversion

what would that look like uh what would it look like if we had an

extreme volatility move what would it look like if i started trading stocks rather than fx what would it look like if i move from futures to this to that’s the other you know and just thinking because then you haven’t got the double whammy of wow your revenue suddenly stopped your account balance has stopped growing because the strategy’s not working and i don’t know what to do next you’ve actually got the bang of okay it’s not working right now i know what my plan is to move forward and to get the back on the throttle

and get that revenue curve back up again alright guys take care

i’ll see you next one keep your wrist managed bye

you

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