CHAPTER 1
Market Scoring
It is not enough to do your best; you must know what to do, and then do your best.
—W. Edwards Deming
Many sports enthusiasts consider October 25, 1964 the date of one of the most embarrassing moments in sports. During a game against the San Francisco 49ers, Minnesota Vikings defensive end Jim Marshall had the good fortune to scoop up a fumble. He then ran 66 yards for the end zone and threw the ball away in celebration. Unfortunately, he had crossed into the wrong end zone and scored a safety for the opposing 49ers.
“My first inkling that something was wrong was when a 49er player gave me a hug in the end zone,” commented Marshall after the game.
Best efforts, in sports as well as in trading the markets, are noble but not always fruitful. Jim Marshall had the necessary skills and certainly put forth his best effort, but he lost sight of his position and ended up on the losing side of the play.
A trader who “does his best” will memorize 50 candle patterns, run fundamental and technical screens at the start of every trading day, and hold his own in any discussion about the merits of Fibonacci retracements versus Elliott waves. To be sure, there are prerequisite skills that a trader should master before entering the markets, but knowing which skills to master and how to use those skills to manage your position can mean the difference between winning and losing.
INTUITION CAN BE HIGH TUITION
Let's begin with the obvious question: Why do we need a market-scoring ...
