For a bird to fly, both the wings are equally important. Similarly for a trader to succeed, especially for a Price action trader, he also need two wings.
1. Knowledge about setups
The first wing is knowledge about patterns or setups. This is very important to identify a proper location to enter into a trade. But it is not sufficient, we cannot able to successfully trade only with setups. Like a bird cannot fly with one wing. During starting of my trading, sometimes even now, I was trying to fly with one wing. That is entering into the trade only based on setup. But most of the time i used to fall.
Then I realized the importance of the second wing. So the other wing of trading is understanding what market is doing.
2. Understanding market flow
Understanding what market is doing is very critical. This is all about establishing the market bias (Long, short or range) in our mind and align our trade strategy with that bias. This process will be starting even before the market begins. Based on previous days market we have to establish big picture and based on that we need to establish the bias.
But here also I faced one danger. The bias, which we established in our mind should be as dynamic as possible. This is where the concentration plays very important. Market will punish us, if we are not able to concentrate and update our bias based on the clues what market gives.
But to master this, I need lot of practice and screen time. Basically i am in the process of establishing that. Hope to establish this before my exhaust. Please update me if my perception is wrong.
