Hudson+Sessions+1 Final

Adam H.
Grimes
Saturday 6 May 2023
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If you would be a real seeker after truth, it is necessary that at
least once in your life you doubt, as far as possible, all things.
-Descartes
Book does not offer set of rigid setups,
but a comprehensive approach to technical trading
Trading is hard
▪ Markets are usually very close to efficient
▪ Most price movements are largely random
It is very difficult to make money trading
▪ And more difficult to keep it
To do so, you must have a verifiable edge
“The Art & Science”…
Whichever side you are afraid of, become unafraid
Fundamentals “work”
▪ But not like people think
▪ And on longer timeframes
What I’ve done over the past decade or so…
What’s the most important thing to know about
fundamentals?
Let’s talk about news and narrative
I think is much better understood than when I wrote
the book
But many traders still get lost
▪ Focus on “high probability” trading is dumb
▪ Focus on high risk:reward trading is dumb
It should be obvious, but your win rate is influenced
by the relative size of your stop and profit target
▪ If you don’t use them, you still have them realized
It’s worth cultivating the skill of thinking in scenarios
And also worth understanding probability
▪ And randomness, but that’s a harder one…
If you don’t have an edge, nothing will help
▪ Money management is not an edge
▪ Psychology is not an edge
▪ Discipline is not an edge
▪ Etc.
Every edge we have, as technical traders, comes from an
imbalance of buying and selling pressure
If we limit our involvement in the market to those points
where there is an actual imbalance, then there is the
possibility of making profits
We can sometimes identify these imbalances through the
patterns they create in prices
▪ Be clear on this point: we do not trade patterns in markets—we
trade the underlying imbalances that create those patterns
There is no holy grail in trading, but this knowledge comes
close
Not playing same game
But let’s talk about crypto and meme stocks…
My indicator settings are currently in flux
▪ First time in nearly 23 years…
I am focusing more on an approach that assesses the
character of markets
▪ Candlesticks help
▪ Overlap with “price action” trading
I still use the same patterns in the book
Some stats in some markets have changed
Trading naked
Bar-by-bar
Simple patterns
“Finger in the sand”
▪ Represents power of buyers/sellers
▪ Overlap with tapereading
▪ As specific contrast to market structure
In the book I talked about motive and resistive forces
▪ This was pretty nerdy
Now I think in terms of momentum and mean reversion
Yes, intuitively
Can you trade them as-is?
▪ I don’t think so, but I may be wrong
Length of swing matters
▪ Character of swing
▪ Can be assessed by candlesticks within swing
Rejections matter
▪ “Reversal complexes”
The 50% level (with a big margin of error)
Reading inside bars
▪ Inferring price action that might have created bar
I focus more on wicks
▪ (Shadows or tails interchangeably)
Corollary: shaved bars are important
▪ Especially if large range
I’m also aware of “reversal complexes”
I’m sensitive to patterns that show:
▪ Emergence of momentum
▪ Subtle buying/selling pressure in ranges
This has been a major point of debate over the years
▪ On one side, some people say every tick matters
▪ On the other side, some people say the market tends to
be pretty random most of the time
▪ And price bars have a degree of randomness built in
How do we resolve this?
A statistically valid sample technique
Do random samples accurately reflect a population?
▪ We’ll come back to “random” later
Yes, usually, if…
▪ The sampling is properly done
▪ And is done often (and/or large sample)
We do not truly know any sample is unbiased, but
we can bet that most are
Price bar patterns accurately reflect underlying
market dynamics
(But details are suspect!)
Just do it
Write down daily prices for a handful of assets
Do swing charts
Do bar/candle charts
Do work on printed charts
Pencil and paper engages a different part of mind
Referral link (you get discount, I get some lunch money):
▪ remarkable.com/referral/R3QM-LJCE
My blog adamhgrimes.com
Twitter @adamhgrimes
Marketlife.com
My books (search on Amazon)
Tuesday 16 May @ 20:00 EDT
▪ We are going to try both weekends and weeknights
Will cover chapter 2 and part of chapter 3

▪ You will be prepared if you read chapter 2

Hudson+Sessions+1 Final

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Adam H.

But let’s talk about crypto and meme stocks…

How do we resolve this?

(But details are suspect!)

Will cover chapter 2 and part of chapter 3

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