MJ

There is an enormous difference between tracking relative strength and constantly chasing it in a poor environment.

Environment > Setup Like most things, this can mean something different to everyone. Here's what it means to me: First, I define 'Environment' through price action. I don't use multiple breadth measurements, momentum indicators, sentiment etc etc. I rely on PRICE and PRICE only. Second, what 'Environment' am I looking for? I'm looking for an environment that is conducive to MY style - and I'm someone that exploits trends through swing and position trading. I don't care if it's a great day trading environment - I'm not a day trader. So what's my key ingredient? FOLLOW THROUGH. Period. In a conducive environment I'm seeing clear follow through in price action - leading names trending on key SMA's and being quickly supported on pullbacks. Breaks above trendlines or pivots that see follow through the next session, for example. What are the key ingredients of a POOR ENVIRONMENT for my strategy? 1 - Multiple material opening gaps in both directions 2 - Multiple material intraday reversals 3 - Weak / Ambiguous mid-term trend structure 4 - News Driven Price action The result is LACK OF FOLLOW THROUGH. Names will break above a trend line or a pivot and almost immediately reverse. Each of the above items is base solely on PRICE action. They are easily identifiable to anyone with a cursory understanding of price charts and don't require the extra ambiguity of indicators, oscillators etc etc etc. Fighting a poor environment by constantly engaging 'setups' will reduce your probability of success. It's that simple. Conversely, I want to hit the gas when follow through (as evidenced by price action) is strong. In a strong environment with robust follow through even mediocre setups will move in the direction of the trend. Simple concept. Simple process. Over 27 years of trading I have found VERY few things more impactful to my returns than getting aggressive in a 'strong environment' and backing off during a 'poor environment'. Focus on impactful decision.