From Frustration to Success: How Traders Can Thrive in Changing Market Environments

"Month & Quarter End Madness: Understanding the Market Flush and Surge"

Sep 30, 2023

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You can watch the full podcast episode on Youtube at Confessions Of A Market Maker

Trading Insights from the Confessions of a Market Maker Podcast

Hello everyone, I'm your host Ray, and today I'm excited to share some insights from a recent episode of our podcast, Confessions of a Market Maker. My co-host, JJ, and I had a lively discussion about the current market conditions, the importance of discipline in trading, and even touched on the chaos of Black Friday.

Weather Talk and Market Conditions

Our conversation started with a light-hearted discussion about the weather in our respective locations. While I'm still experiencing the extended summer heat in Florida, JJ is enjoying the cool down in Europe. We both expressed our anticipation for winter and joked about the challenges of extreme weather conditions.

Trading Frustrations and Losses

We then moved on to the main topic of our discussion - the frustrations and losses that traders, both experienced and inexperienced, have been facing in the market. JJ pointed out that the end of the quarter has brought about a change in price action, with markets becoming more challenging and rotational. He explained that position traders who were long in the summer have now sold off their inventory, leading to a lack of price stability.

The Importance of Process, Discipline, and Patience in Trading

JJ emphasized the importance of having a process, discipline, and patience in trading. He shared his own experience of adapting to changing market conditions and the difficulty of figuring out what's going wrong and how to adjust. He highlighted the lack of support systems in retail trading compared to institutional trading and emphasized the value of our trading room in helping traders stay out of trouble.

I agreed with JJ on the importance of having a process and following rules and strategies. I mentioned that having a system in place helps bring traders back to fundamentals and keeps them grounded during tough times. We discussed the psychological impact of losses and the need for discipline and a process in trading.

Trading Biases and Impulsive Trades

JJ compared trading without discipline to driving with someone giving you directions and ignoring them because you're too wrapped up in your own emotions. He emphasized the need to listen to the market and follow clear signs instead of trading based on biases or making impulsive trades.

The Challenges of Month-End Trading

JJ mentioned that the end of the month and quarter can be challenging times to trade, as institutions and large traders are closing positions and accounting for profits. He advised waiting for better price action and being patient for the right trade to develop. He also highlighted the benefits of using funded trader programs, as they enforce discipline and provide structure.

The Success of Our Workshop Course

We also discussed the success of our workshop course, where we teach traders fundamental trades that can be consistently profitable. JJ was pleased to see participants making money and passing evaluations after going through the course. He emphasized the importance of continuous learning and improving teaching methods to help traders succeed.

The Chaos of Black Friday

JJ compared the month-end dynamics in the market to the chaos of Black Friday, where people fight each other to get discounted products. He explained that in the market, buyers and sellers are not fighting each other directly, but rather competing to capture buying or selling opportunities.

The Importance of Breaking Up Trades

JJ reflected on the previous day's market activity, describing it as a "Black Friday sale" where he observed many short positions being taken. He emphasized the importance of not trying to capture the entire range in one trade but instead breaking it up into smaller, manageable pieces.

Black Friday and the Market

We then shifted the conversation to Black Friday itself, expressing our disbelief and lack of interest in participating in the shopping frenzy. We discussed how Black Friday has spread to Canada, despite the timing not aligning with Canadian Thanksgiving. We acknowledged that selling is the name of the game and that there will always be people putting money into the market.

In conclusion, our discussion highlighted the importance of discipline, patience, and having a process in trading. We also emphasized the need to continuously learn and adapt to changing market conditions. Stay tuned for more insights from our podcast, Confessions of a Market Maker.