Hello!
First off, Eric, thank you so much for the course. It's been a huge help in giving me the structure I needed in learning the core concepts of price action.
I've completed the course, but am having some trouble understanding the process of lessons 5.4 - Practice and Training and lesson 7 - Mental Performance. Lesson 5.4 gives a nice workflow to go from static to live. But then lesson 7 talks about inserting a mechanical trading plan, and that's where I'm getting tripped up.
I'm wondering the process of going from static chart to live sim while using a mechanical trading plan. I have a pretty basic trading plan already setup, I know what trades I'm looking for and in what contexts and I have that laid out, as well as management and other things.
The trouble I'm having is implementing it into a mechanical trading plan. I'm also wondering the process of going to static to sim to live and how it works with the mechanical trading plan, as well as looking to add more trades.
Is this more of a personal journey at this point? Or is there still a good flow to work through?
For example, Create basic trading plan -> Study Static Chart -> Live sim -> Live -> Study more trades -> Add them to trading plan -> and repeat process until satisfied and then work into a more mechanical trading plan using my long-term experience.
Or Create basic trading plan -> Study Static Chart -> Live sim -> Live -> Mechanical trading plan -> Study static chart -> live sim -> live -> Then add more trades in with the mechanical trading plan.
Or Create mechanical trading plan -> Study static Chart -> Live sim -> Live -> Repeat with more trades as necessary.
When I say mechanical trading plan, I mean laying out more the detailed nuances in the plan to the point where trading is basically a checklist of things. My thought was the last one would be ideal, but in practice it's a ton to be adding and I feel like I need to simplify, which then makes me lean towards option 1 or 2 where the mechanical trading plan comes from more long-term experience.
I'd love to hear some thoughts or advice on the above.
Thank you!
When to add in a mechanical trading plan?
Re: When to add in a mechanical trading plan?
First - CONGRATULATIONS on making it through the course! There is a lot of material which is covered, and a TON of homework!!! Not achievable in a weekend or two, but across a couple of months - 
.
Lecture 7, if you work through there are a few steps before you create "your plan". Note that the decisions are very precise and defined. Mechanical is just that -> very little decision or thought required. Binary: it is or is not. Example, perfect signal bars might be an excellent starting point. What does that look like [visual examples are a quicker way to develop]? 7 is about execution, irrespective of your personal feelings.
In this way, you can determine whether you are taking appropriate trades or not. Mechanical -> well, you are either taking the right trades or you are not. If you are not, then there is bias/emotion which will stymie your efforts and measurements. "Your trades" may not happen all the time, or if the market changes, very often. As you will have researched and validated your edge, another part is avoiding the market when your edge, as defined isn't present. That isn't to say you can't define other edge examples [or use different markets, etc], but that requires testing before placing into a "production environment".
Hopefully helpful and good trades to you!
.Lecture 7, if you work through there are a few steps before you create "your plan". Note that the decisions are very precise and defined. Mechanical is just that -> very little decision or thought required. Binary: it is or is not. Example, perfect signal bars might be an excellent starting point. What does that look like [visual examples are a quicker way to develop]? 7 is about execution, irrespective of your personal feelings.
In this way, you can determine whether you are taking appropriate trades or not. Mechanical -> well, you are either taking the right trades or you are not. If you are not, then there is bias/emotion which will stymie your efforts and measurements. "Your trades" may not happen all the time, or if the market changes, very often. As you will have researched and validated your edge, another part is avoiding the market when your edge, as defined isn't present. That isn't to say you can't define other edge examples [or use different markets, etc], but that requires testing before placing into a "production environment".
Hopefully helpful and good trades to you!
Re: When to add in a mechanical trading plan?
That does help clarify some things, thank you. I was thinking the mechanical part came in later, but I see that the trading plan itself should be mechanical.
This is what I was trying to work on originally, but ran into some trouble.
In that case, is the goal of the trading plan to be 90%+ matching to Mack's red/blue trades before being considered ready to test in sim?
This is what I was trying to work on originally, but ran into some trouble.
In that case, is the goal of the trading plan to be 90%+ matching to Mack's red/blue trades before being considered ready to test in sim?
Last edited by chrundle on Thu May 18, 2023 10:29 pm, edited 2 times in total.
Re: When to add in a mechanical trading plan?
If trading from a mechanical perspective, that would be a good target. Essentially it is ensuring that your trade selections are in agreement with the chosen selections for any given day. Not because of who it is, but because it is representative of where the edge exists.
You will find that traders are most often entering at the same or similar points, even with different systems.
Good trades to you!
You will find that traders are most often entering at the same or similar points, even with different systems.
Good trades to you!
Re: When to add in a mechanical trading plan?
Hey Eric, sorry I edited my post above after you responded., I'll post below.
What's still confusing me a bit is lesson 5.4. It talks about studying static charts and your trades marked should be able to match Mack 90%+ and then talks about Simulation/Live market training. It mentions staying in sim until your metrics say you have an edge.
The above sounds like a way to go from static to live trading and it doesn't really mention a completely mechanical system to do it. So when lesson 7 talks about a pure mechanical trading plan, I'm not sure where to go next.
In lesson 5.4 you do mention binary decisions, but I took that as more on a higher level, like use a binary decision to note what context we're in so you know what trades you're looking for.
There's also a slide that mentions -
"NOTE: Using the exceptional signal bar criteria with good context creates attributes of a fairly mechanical system
- Well defined structure will allow reduction of decision making and stress. allowing more learning."
It mentions a fairly mechanical system, which seemed to agree with my assumption that the binary processes were more for context. Since binary context + strong signal bar requirements seems to fulfill the "fairly mechanical system"
Did I just misunderstand 5.4 and should be approaching it purely mechanical, or is there more to it than that?
What's still confusing me a bit is lesson 5.4. It talks about studying static charts and your trades marked should be able to match Mack 90%+ and then talks about Simulation/Live market training. It mentions staying in sim until your metrics say you have an edge.
The above sounds like a way to go from static to live trading and it doesn't really mention a completely mechanical system to do it. So when lesson 7 talks about a pure mechanical trading plan, I'm not sure where to go next.
In lesson 5.4 you do mention binary decisions, but I took that as more on a higher level, like use a binary decision to note what context we're in so you know what trades you're looking for.
There's also a slide that mentions -
"NOTE: Using the exceptional signal bar criteria with good context creates attributes of a fairly mechanical system
- Well defined structure will allow reduction of decision making and stress. allowing more learning."
It mentions a fairly mechanical system, which seemed to agree with my assumption that the binary processes were more for context. Since binary context + strong signal bar requirements seems to fulfill the "fairly mechanical system"
Did I just misunderstand 5.4 and should be approaching it purely mechanical, or is there more to it than that?
Re: When to add in a mechanical trading plan?
There's also the derivation of edge table. Under binary decisions, it talks about market state.
And in 4.9, when you go bar x bar, it seems more like you're reading the chart using the tools taught. Which all seems to align under the fairly mechanical system.
So there's a lot of talk about fairly mechanical, but lesson 7 comes in and talks about complete mechanical. As someone who completed the course and am looking for the next steps, I feel a bit lost on the best way to move forward.
And in 4.9, when you go bar x bar, it seems more like you're reading the chart using the tools taught. Which all seems to align under the fairly mechanical system.
So there's a lot of talk about fairly mechanical, but lesson 7 comes in and talks about complete mechanical. As someone who completed the course and am looking for the next steps, I feel a bit lost on the best way to move forward.
Re: When to add in a mechanical trading plan?
4.9 is a very important section. What many may not realize is that the description at the particular points are independent of what is to the right. It is reading at the right edge. Because of the edge, a great many times things work out. It just so happens that the viewer gets to see the "to the right" at the same time .
With respect to mechanical, this gets into replication by a set of specific clear rules that will lead to the same decision time and again, irrespective of what is to the right (because we do not get to see that). Several specific rules are outlined in the course to achieve very close to a completely mechanical system. Perfectly mechanical is not possible as the market is different every day, and every trade. However, the edge replicates the same or similarly in each case, making it measurable and definable.
Working through 7, the first series of trades - - - review that. It has nothing to do with emotion, or anything else other than execution, execution, execution. Mechanical - - -all about execution, and you can measure your unbiased performance that way.
What rules can you develop that you can adhere to the same exact way every single time? Not whether it works or not, what actions - every single time. That makes it mechanical (and if it has significant edge - profitable). What does something need to look like visually, and appear (in live motion), to say - check, check, check (if 3 step confirmation) -> place trade -> manage trade (if you have management in the process)? One doesn't have to know what is happening across the entire chart. One simply has to recognize specific situations, and when they occur, to take action. During those times, and only during those times (especially with high probability). If you want to start with the highest probability, the signal bar closing should be perfect, and the direction highly consistent throughout, and in an opposite direction of the preceding bar. The more one wanders from this, the lower the probability. One can add additional rules using both static charts to overview logic, and please remember to incorporate some of the critical aspects shown in the 5.1-5.x dynamic overviews.
Hopefully helpful and good trades to you!
.With respect to mechanical, this gets into replication by a set of specific clear rules that will lead to the same decision time and again, irrespective of what is to the right (because we do not get to see that). Several specific rules are outlined in the course to achieve very close to a completely mechanical system. Perfectly mechanical is not possible as the market is different every day, and every trade. However, the edge replicates the same or similarly in each case, making it measurable and definable.
Working through 7, the first series of trades - - - review that. It has nothing to do with emotion, or anything else other than execution, execution, execution. Mechanical - - -all about execution, and you can measure your unbiased performance that way.
What rules can you develop that you can adhere to the same exact way every single time? Not whether it works or not, what actions - every single time. That makes it mechanical (and if it has significant edge - profitable). What does something need to look like visually, and appear (in live motion), to say - check, check, check (if 3 step confirmation) -> place trade -> manage trade (if you have management in the process)? One doesn't have to know what is happening across the entire chart. One simply has to recognize specific situations, and when they occur, to take action. During those times, and only during those times (especially with high probability). If you want to start with the highest probability, the signal bar closing should be perfect, and the direction highly consistent throughout, and in an opposite direction of the preceding bar. The more one wanders from this, the lower the probability. One can add additional rules using both static charts to overview logic, and please remember to incorporate some of the critical aspects shown in the 5.1-5.x dynamic overviews.
Hopefully helpful and good trades to you!
Re: When to add in a mechanical trading plan?
Sorry Eric, I meant 4.8 Edge. I definitely understand 4.9 and how the analysis is independent of the rest of the chart.
I think I get it now. I've been working on a trading plan for a while and was getting overwhelmed trying to cover the different nuances. I started simple enough, but was running into situations where there's bad trades so I add more rules. With things like congestion, always-in, how the bars break etc. is very easy to set rules for, but more abstract rules like handling conflicting contexts I struggled with.
After running into the more abstract rules, it got me thinking that I may have been doing it wrong. It sounds like I just need to take it slow. Thank you so much for clarifying things. I'd run into a road block and then second guess my approach, so that helps a lot.
I think I get it now. I've been working on a trading plan for a while and was getting overwhelmed trying to cover the different nuances. I started simple enough, but was running into situations where there's bad trades so I add more rules. With things like congestion, always-in, how the bars break etc. is very easy to set rules for, but more abstract rules like handling conflicting contexts I struggled with.
After running into the more abstract rules, it got me thinking that I may have been doing it wrong. It sounds like I just need to take it slow. Thank you so much for clarifying things. I'd run into a road block and then second guess my approach, so that helps a lot.