Mind Over Markets: Power Trading with Market Generated Information, Updated Edition

Chapter 4

Competent

Let us think back for a moment to David, the aspiring pianist. David reached the third level of learning and became a competent pianist after many months of study and practicing the basics. He began to see each song as a whole, a certain expression to be performed with a definite goal in mind. He still played by reading the notes but achieved continuity in his playing.

In this chapter, we will complete the study of the basic concepts and theories behind evaluating market-generated information through the Market Profile. We will give a thorough discussion of practical applications to day and longer timeframe trading. By the close of Competent, more of the big picture will be revealed as the basics merge together to make you a competent trader.

Doing the Trade

All reasonings concerning the matter of fact seem to be founded on the relation of Cause and Effect....I shall venture to affirm that the knowledge of this relation is not in any instance attained by learning a priori, but arises entirely from Experience.

—David Hume

Knowledge arises from experience. Just as a musician practices diligently to become a concert pianist and an athlete spends uncounted hours on the court to become a great tennis player, a trader must gain experience through actual trading to become an expert trader.

Any effective performance is a combination of knowledge, skill, and instinct. With each trade, you put your knowledge, your understanding, and your experience on the line to be ...