Adrian Reid explains why traders fail when they apply the same system to every market without understanding its unique characteristics. He uses Venice as an analogy for how context changes everything about how you operate.
So some markets are distinctly different than others. Every market has its own characteristic. Have you ever noticed?
So right now, we just arrived in Venice, and we're in a water taxi on the way to our accommodation. Because the only way you can get to the accommodation is by boat. Now, this obviously has a completely different character and a completely different set of behaviors than every other city we've been to so far on this trip, which is pretty awesome. It's really exciting. I love Venice, and I've been really looking forward to coming back for a long time. But one of the things that you got to remember in the market is you have to look at the behavior and the personality of the markets that you're actually trading. If you just blindly read in a trading book a trading system for the US Stock market. And you try and apply that to the Australian stock market or the London stock Exchange or any of the Asian markets, chances are it's not going to work very well. You and I actually fell victim to this problem for several years. When I was first learning to trade, I was struggling, and I couldn't quite figure out why. And the reason I figured ultimately I figured out why I was struggling was because I was trying to take systems and rules that were designed for one market and put them in, transplant them into a different market without adapting them for the market personality. Just like in Venice, you can't rock up with a car and expect to be able to drive around town. You've got to turn up and you've got to get on the boat. And it's a whole different culture. You walk around the labyrin of buildings and pathways through the city. And when I finally figured this out about the stock market, that each market has different personalities, I started observing the market. And you need to do this too. Whatever market you want to go into. Step one is to observe the type of moves that happen in that market. And once you've started observing the moves, you can characterize them and describe the type of move that you're going to catch. Now, when I moved from the Australian market and went into the Hong Kong market, I did exactly this. I first looked at a whole bunch of charts and understood and characterized the personality of the Hong Kong stock market. And the first system I designed as a result was spectacularly successful because I was able to first understand the personality of the market, then design rules specifically for that personality. Now, if you're struggling to create rules for a new market, this is the step that's missing. So you need to first understand the personality of the market and design rules specifically for that market. Now I'm off to enjoy Venice. But if you want to improve your trading trading system confidence and understand how to better build trading systems and test them so that you can follow them with absolute confidence, click the link below and download my Trading System Confidence Cheat Sheet so that you can learn the steps that I use every single time I develop a new trading system to build rock solid confidence in that system so I can follow those rules without question, without stress, and without worry. Click the link below and download my Trading System Confidence Cheat Sheet. My name's Adrian Reed. This is Enlightened Stock Trading and I'm off to enjoy Venice, so I'll see you in the next video. Bye for now. Click link below and download the Trading System Confidence Cheat Sheet.
