• Sun. Jul 14th, 2024

Why traders turn to playbook trades to overcome challenges

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Here’s a question for you…

Last Friday’s game plan unearthed a significant opportunity to trade the long side (buy to sell higher!).

(Like envisioning a completed jigsaw puzzle—your game plan is your roadmap for confidently navigating the day’s price moves.)

Looking at the chart below:

Chart

Do you buy it right now? If yes:

  • How much do you buy?
  • Where’s your stop?
  • Where can you move it for a risk-free trade?
  • Do you take partial profits?
  • Or do you look to add to the trade?
  • When and where?

Or do you wait for a price pullback before entering? And if so:

  • How far does it need to do that?
  • But what if it doesn’t?
  • And what about your stop?
  • How far away do you place it?
  • Does the distance of your stop vary depending on where your entry is?

We haven’t even scratched the surface

But let’s pause…

What if you didn’t need to think about the answer?

Phew! Right?

Tell me:

Have you ever seen a learner driver navigating peak-hour traffic for the first time?

You feel for the driver knowing they’re grappling with all the steps they need to take. It’s a bit like the list of trade decisions above. Agree?

It sharply contrasts your experience of changing lanes to complete a right-hand turn.

Parallel parking, u-turns, stopping at red lights, navigating roundabouts—so many different scenarios you navigate with ease and barely a conscious thought. Correct?

What if entering and managing live trades was equally as straightforward? Well, guess what? This is exactly what playbook trades achieve.

(Playbook trades are the pieces to your completed jigsaw. Based on how the market behaves—they guide you to which strategy best fits your game plan.)

Playbook trades take the overwhelming experience of the list of trade decisions above and turn them into near-automatic responses like those you make while driving. Make sense?

And in all the driving scenarios what’s the first consideration always? Safety. Correct?

Playbook trades are no different.

Now let me show you:

Moving forward from the chart above you see how the market unfolded in the chart below.

Chart

  • Can you see where the first buy was made at number 1?
  • And can you see where the safety trigger was activated by selling at number 2?
  • And see the 2nd buy at number 3?
  • Can you see where that was exited at number 4?

Question:

What do you notice about the safety exits? They’re the equivalent of paper cuts. Correct?

Guess what?

When you know you’re wrong with such a tiny move against you? You can trade much larger sizes without increasing your risk.

And why do that?

While delving into this topic warrants its own discussion… Essentially you’re not relying on the market making less frequent large moves to receive a meaningful payout.

This overcomes a common trading challenge–the need for the market to hit a specific target—only to present an elusive opportunity before reversing. Sound familiar?

But a less apparent aspect of playbook trades is responsible for significant trading transformation—from grappling with constant negative performance to achieving consistency.

Do you have any guesses as to what it is?

Here’s a clue…

Do you ever feel frightened you’ll suddenly end up in a catastrophic collision with another vehicle as you pull up at a red light? It doesn’t enter your mind. Correct?

But imagine you’re travelling along the highway, and up ahead, you see the lights change. You know you should begin slowing down to give yourself ample time to bring your vehicle to a complete stop a the red light.

But as you take your foot off the accelerator and squeeze the break—you notice your car isn’t slowing down.

Your brakes are failing, and you’re about to run straight through the red light at a considerable speed into oncoming traffic. You’re suddenly filled with legitimate fear for your safety.

Under normal circumstances, you don’t experience fear while driving. Yet if faced with a dangerous scenario fear overwhelms you.

Now, if you’re like most people who’ve been trading financial markets, you’re bound to have experienced painful scenarios—experiences that you’ve gone through multiple times. Correct?

Understandably, your fear is ever-present. And it’s detrimental because it inhibits your current trading. Agree?

But like stopping your car at a red light, playbook trades are a tool that removes the danger. Yet you don’t instantly experience transformative change to fearless trading simply by knowing about playbook trades. Transformation occurs through action. Right?

Proficiency in driving isn’t achieved immediately; it requires repetition. Similarly, it’s common sense to trade in a simulated environment until you can successfully execute your playbook trades.

As a guide: When I work with a new client, you build repetitions in your first playbook trade at week 4. This is the same playbook trade underpins the bulk of my trading.

Just as stopping at a red light is an instinctive response, so does recognising the trading equivalent of running a red light.

You know this intimately—that feeling of apprehension when deviating from your playbook trades. And here’s the beauty of it: that fear, though persistent, is your ally. It’s a built-in safeguard, ensuring you avoid risky manoeuvres.

Your experience-based awareness of what’s harmful keeps you from deviating from playbook trades. It’s no different from why you don’t second-guess stopping at a red light.

Playbook Trades transform your trading

Trading can involve an overwhelming number of decisions which easily leads to omissions and errors in your trading.

Playbook trades solve this problem by providing a clear roadmap, akin to effortlessly navigating familiar terrain. Just as you instinctively manoeuvre your car through well-known streets, playbook trades guide you confidently through the complexities of trading.

And like driving a car, all playbook trades focus on safety first, protecting your account capital.

Prior trading experience is often riddled with painful experiences that negatively impact future trading.

Consider a moment when you approach a traffic light: you stop at the red, not out of fear, but out of learned safety. Playbook trades offer this same assurance, removing the danger and instilling a sense of security in your trading decisions.

Moreover, many traders face the ongoing challenge of trades not reaching their targets, resulting in their trading accounts losing money because winning trades do not make up for the losses.

Playbook trades solve this without adding to the risk.

They amplify gains transforming a modest success into a lucrative opportunity.

If you’re ready to transform your trading with playbook trades, reach out to someone with an extensive playbook who’s experienced at transferring these skills.

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