{"id":32733,"date":"2013-10-16T16:41:23","date_gmt":"2013-10-16T20:41:23","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=32733"},"modified":"2023-04-27T05:54:51","modified_gmt":"2023-04-27T09:54:51","slug":"aware-of-your-thought-framework","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/aware-of-your-thought-framework","title":{"rendered":"Aware Of Your Thought Framework?"},"content":{"rendered":"<p>When first starting out trading any instrument, many beginners already have a thought framework in place whether they are aware or not. Most of the time, this thought frame work is conventional in nature. \u00a0This means that their reasoning process relies on things like conventional market wisdom, other peoples opinions and gut feelings. From the start, new traders are set up to fail and it is simply because they focus on the wrong information. \u00a0In order to compete professionally in the trading world, a specific thought process needs to be developed in order to value and weigh market information effectively.<\/p>\n<p dir=\"ltr\">An effective thought framework for a professional trader involves knowing what information to focus on and how to analyze it properly. \u00a0Keep in mind there is no single way to analyze market data, it all depends on what you are observing and how to apply that information to your risk management. \u00a0When it comes to a thought framework for trading, it is first important to understand the natural processes that are present in a financial market. For example, one concept that we observe regularly is long or short covering. \u00a0The conditions for this trader behavior to occur can be isolated to specific price levels and formations.<\/p>\n<p dir=\"ltr\">Instead of being distracted by news, random price action, or other peoples opinions, the traders in our program learn to focus on and compare variables related to price action. \u00a0Price action analysis involves identifying trends or range bound conditions through price structures. \u00a0It also involves observing historical price information from larger time frames and comparing that to more current price structures. \u00a0For example it is possible to have a broader bullish trend while observing a bearish correction within that trend on a smaller time frame. \u00a0Inexperienced traders are more likely to define this bearish condition as the \u201ctrend\u201d because they are easily blinded by their short term indicators. They take short positions with unreasonable or irrelevant expectations, meanwhile they are shorting into a broader structure that is strong. \u00a0Having a flawed thought framework or not knowing how to process this information into expectations that are relevant to market conditions is the sign of a conventional trader.<\/p>\n<p dir=\"ltr\">Following steps to collect market variables and compare them to come up with actionable trading ideas is easier said than done. \u00a0Without a strong understanding of the market processes that generate this information, it is hard to interpret markets intentions as price action unfolds. \u00a0This is why it is so important to have an experienced trader regularly evaluate and offer feedback on your trading performance.<\/p>\n<p>I use these steps in my weekly analysis videos, but if you want to learn them first hand, then consider my one-on-one training. \u00a0Either way, in order to grow as a trader, you must have a process that you follow every time. I hope this helps. \u00a0Please let me know what you think.<\/p>\n<p>&#8212;<\/p>\n<p>Marc Principato, CMT,<br \/>\n<a href=\"http:\/\/stocktwits.com\/SMBForex_Marc\"><img decoding=\"async\" src=\"http:\/\/twitter-badges.s3.amazonaws.com\/follow_me-c.png\" alt=\"\" \/><\/a><\/p>\n<p><a href=\"http:\/\/www.smbtraining.com\/risk-disclaimer\">Risk Disclaimer<\/a><\/p>\n<p>*No Relevant Positions<\/p>\n","protected":false},"excerpt":{"rendered":"<p>When first starting out trading any instrument, many beginners already have a thought framework in place whether they are aware or not. Most of the time, this thought frame work is conventional in nature. \u00a0This means that their reasoning process relies on things like conventional market wisdom, other peoples opinions and gut feelings. From the start, new traders are set &#8230; <a href=\"https:\/\/www.smbtraining.com\/blog\/aware-of-your-thought-framework\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":1030,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2076,2051],"tags":[1390,2092,3481,383,2833,2877,420,56,18,726,2460,2876,653,38,4690,3336,2060],"class_list":["post-32733","post","type-post","status-publish","format-standard","hentry","category-marc-principato","category-smb-forex","tag-forex","tag-forex-training","tag-framework","tag-futures","tag-market-context","tag-multiple-time-frame-analysis","tag-setup","tag-smb","tag-smb-capital","tag-technical","tag-thought","tag-time-frame","tag-trader-training","tag-trading","tag-trading-education","tag-unconventional-trader","tag-volume-analysis","no-post-thumbnail"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Aware Of Your Thought Framework? | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/aware-of-your-thought-framework\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Aware Of Your Thought Framework? | SMB Training\" \/>\n<meta property=\"og:description\" content=\"When first starting out trading any instrument, many beginners already have a thought framework in place whether they are aware or not. Most of the time, this thought frame work is conventional in nature. \u00a0This means that their reasoning process relies on things like conventional market wisdom, other peoples opinions and gut feelings. From the start, new traders are set ... 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