Trading Essays by Patrick Neil German trader, two time World Trading Championships (Robbins Cup) champion, consistently ranked in the top three globally for several consecutive years 1. Choose a method based on your own decision-making pace. Scalping is a practice of entering and exiting in seconds to minutes, running after earning a few points, and accumulating profits through the number of times, competing for reaction and hand speed It takes me one to three minutes to make a decision, so scalp stripping is not suitable for me. There is no superiority or inferiority in methods, only your reaction speed that is matched or not 2/Looking at the market, I look at the distribution of transactions. The market outline is the arrangement of trading volume by price, telling you at which price point money has actually been traded A long bullish candlestick may just be a quick passing price, and there may not be anyone really doing business at that location The foundation of this set of things is auction market theory The market is a continuous two-way auction, where the buying side bids upwards and the selling side asks downwards. Once both sides reach an agreement at a certain price, a transaction is made The more transactions at the same price, the more fully accepted it is The areas where transactions are thin are the areas where negotiations have not been reached. The price can quickly pass through it, but that's not considered accepted This type of blank area price will have to be renegotiated sooner or later, as it is the source of all future trading opportunities The 5/value range is the price band that the market truly accepts, typically covering around 70% of the trading volume The area with the highest density of transactions in the tape is called the value center, where prices go back and forth and eventually return to it, like a magnet 6/Judging direction: Do I see if the value range is moving upwards or downwards Lifting upwards represents the buyer pushing the center of gravity of the transaction upwards, while sliding downwards is the opposite The center of gravity is more honest than the moving average, it won't flip over just because of the shaking of a few candlesticks 7/The support resistance should be drawn as a region, not a line. A single line is meaningless, the entire section where the price is repeatedly blocked or held back in the same position is truly guarded by someone I only look at three forms: P, B, and D, which are arranged according to the market outline 9/P shape, the price quickly rises for a period of time, and then stays horizontally at a higher position The thicker it is horizontally, the more likely it is that someone is constantly changing hands to receive the goods The thin tail below is the price at which no one has done business before The P shape represents the buyer controlling the situation, and the callback is used for buying 10/B shape, in reverse, quickly smash a section downwards, then hold horizontally at a lower position, leaving a thin tail on top The seller has an advantage, and the rebound is for selling 11/D-shaped, standard bell shaped, with a central drum and two ends converging, with the value center located in the center On days like this, both long and short sides feel that the price is reasonable, and there is a high probability that it will continue to grind back and forth in the range the next day. Therefore, we need to rely on both sides to do the opposite 12/What is three-layer alignment? The first layer is to use market contours to determine direction, the second layer is to draw support resistance areas, and the third layer is to wait for a P, b, D shape to appear. Only when all three layers point to the same conclusion can an order be placed The function of three-layer alignment is to independently judge the same thing twice Direction and timing come from two different dimensions, and the probability of misjudgment decreases significantly when the two dimensions resonate. Without any layer, the conditions are not considered valid 14/Fixed time frame, place an order on the 15 minute chart, view the overall pattern on the 4-hour chart, and ignore the cycles in between. The more cycles you watch, the more reasons you can find for hesitation After the appearance of the form, there are two paths. Follow the trend and buy when the P shape breaks upwards. The other option is to wait until it breaks through and fails before turning back, and I prefer the latter 16. Accounts that go against the trend are the best to calculate. The price rushes out and falls back into the value range, with the target set there, returning to the other end of the range, or even walking back to the starting point of this market trend, with the stop loss placed above the high point that just didn't stand firm. Take profit clearly, stop loss clearly, expected value clearly visible at a glance The most difficult part of following the trend is that no one knows how far it can go, and you can only rely on your intuition to move out in batches. The profit and loss ratio of a counter trend backhand is given by the form itself, without guessing or counting 18. There should be criteria for determining breakthrough failure. The price not only needs to fall back, but also cannot stand on the outside. If two or more K-lines are closed in the range and combined with increased trading volume, this is considered invalid After the cancellation of the 19/form, the price often returns to the starting point of this market trend, because that section was originally a blank area without transactions, and the market needs to make up for it The 20/win rate and profit/loss ratio need to be selected in separate matches. In situations where continuous losses need to be prevented, such as accounts with ranking pressure, time limits, or insufficient payback periods, choose a higher winning rate and prefer to win a smaller one 21/Long term use of one's own money, choose a high profit loss ratio. After the profit and loss ratio is widened, the number of wins decreases slightly, but in the end, more gains are obtained. This is an algorithm that can survive in the long run 22/Avoid the risks of overnight and weekend trading, at the cost of reducing positions accordingly. The risk budget determines the position, and if you want to sleep well, you have to accept earning less from a single transaction 23/Stop loss cannot prevent a short jump. When the position crosses the news or weekend, the opening is a gap, and the gap can far exceed your stop loss. At this time, stop loss is virtually non-existent. Controlling such risks relies on reducing positions, not tightening stop losses The 24/position cycle determines what level of news shock you can withstand. Taking a position from a few hours to five days will result in an overnight news skipping the stop loss, and taking a few minutes of position news will not hit you. First determine the cycle, then determine the method 25/Changing varieties does not require changing methods. The varieties with different proportions of fake breakthroughs have the same form, and what needs to be adjusted is your expectation of fake actions. A framework is a framework, parameters are parameters, don't treat parameters as frameworks to modify When the volatility is too high, the form will be broken up and the stop loss will be repeatedly swept. At this time, the best operation is not to operate. Only sell in markets that you can understand