Brian Macavoy from Inside Out Trading explains why controlling variables in your trading process is essential for consistent profits. He breaks down how market behavior works and what actually moves prices, then walks through the specific steps that separate profitable traders from the rest.
Hi, Brian Macavoy here with Inside Out Trading. Today we're going to talk about, it's kind of a fun topic talking about variables and how this impacts your trading and especially your profits. See, when people are talking about the markets, this big word that gets thrown around the uncertainty of the markets and all that kind of stuff. Yes, there is an element of uncertainty in the markets, but the markets are not random. It's not, because if they were, when you look at a chart, it would look like a scatter plot. There's dots over the place, there's no rhyme or reason to it. But the charts aren't that way. It's like the charts behind me, pretty common looking chart. The markets move, but they're not just here, there and everywhere randomly. So there is an underlying order to the markets. I mean, after all, the markets are people and computer programs. Well, both do thinking patterns and logical progression. There's a progression to or process to the different thinkings. And so the fact that there's an order there and the fact that they are programs and people, that gives us an advantage and that's our edge as a trader is the fact that the markets are not random. When we see something going on in the markets, that lets us know that there is something going, or when we see something on the charts, we know that there's something going on in the markets. And where almost all strategies have been developed from is observing repeated patterns seen in the markets. Whether it's very specific head and shoulders patterns, maybe it's candlestick formations, whatever, but it's where certain phenomena have been observed over and over again. And they represent small windows of predictability for us. And that's cool. And so that kind of counters the whole uncertainty thing. Now, at any given time, is it possible for an event to occur that disrupts a pattern that's already started? Yes, of course. That's why not all patterns play out. But generally speaking, a pattern, once initiated, will play out unless it's disrupted by something else. There's just, that's the nature of things. Now the thing is, so that's the market side of things trading, but you're on the other side of the trading. You're the one center making, making the decisions. How you're going to get in on the markets, how are you going to find, determine a market direction, how you're going to determine your entry, how you're going to determine your exit, where you place your stop, all the pieces that go to a trade. So you're on that side of it now. The market, well, it's not random and there is an order to it. There is a certain amount of variability to it. And so what we want to do as traders ideally is not throw more variables into it. If our goal is consistent, reliable, somewhat predictable at profits. Well, we really, I mean, this is one where we want the overall process to be as predictable as possible and have as few variables as possible. See, when I was in quality assurance, it was funny because the. It almost sounded a little backwards. But one of the ways that we achieve consistency in trading, one of the ways is eliminating variables, eliminating possible causes of inconsistency. And that's what variables are. The more variables you have in a process, the more opportunities you have for inconsistent results. And so what you do as a trader, the more variable you are, the less likely you are to get consistent results, the fewer the variables that you have. If, I mean, if you're the big variable in your trading that's working against you. So you want to be as consistent as you can in what you're doing. And then you want to be working with a process that again, you're minimizing the variables, you're minimizing the inconsistencies that are built into your process. And it's funny because even Deming, the father of modern quality assurance, he had a phrase I've always loved. He said, if you can't define what you're doing as a process, you don't know what you're doing. And the things he was talking about in a business setting. But it applies perfectly for traders as well. You need to have a good, clear process for your trading, not just a strategy, but you need to have a good process for finding and executing your trades so that you are, you're minimizing the inconsistencies, you're minimizing the variables so that the markets, they're going to have their own variability, but you're going to be as constant and as steady and repeatable as you can on your side, hence to get the predictable output of profits. So I've always enjoyed this because a lot of times with traders, we're not thinking in terms of variables. We're looking at the support and resistance and the market turns and the candles that we're looking at and that kind of stuff. We're not necessarily thinking in terms of repeated processes and variables, but it's really important that you recognize where you're introducing variability and hence inconsistencies into your process and your side of the trade, which is everything on this side of the markets. So if you'd like to discuss this further, if you'd like to learn more about this and how to make your trading more consistent, how you can be more consistent and less variable, less inconsistent on your side of things, and you're trading so that you can get more consistent profits, you can have better reliability and more predictability to your trading. Well, swing by Inside Out Trading.com right up here. It's top of the page. You'll see where it says book a link or book a call with Brian and we can get on a zoom call like this. We'll talk about what's going on with your trading, you know, what kind of stuff you've been running into and the best path forward to get you past your obstacles and get your trading onto where it's more fun and profitable and it's just plain working in a good consistent manner that you're looking for. So if you enjoyed this video, give me a like and a subscribe down below. Share this with your friends. Again, I hope this been helpful. Swing by Inside Out Trading.com you can book a call with me. I've got some other resources there for you. So again, hope it's been helpful. Talk to you soon. Cheers.
