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What Does It Mean To Have A Framework?
A framework is an essential supporting structure underlying a system or concept. As traders it's important to have a framework in place that guides us towards the correct solution as the market presents itself.
Brian Vallieres
October 11th, 2022
What Does It Mean To Have A Framework?
A framework is an essential supporting structure underlying a system or concept. As traders it's important to have a framework in place that guides us towards the correct solution as the market presents itself.
Photo by Brad Spicer
Having a framework gives you a stable and consistent approach allowing you to weave in your personal touch.
Most organizations use frameworks as a reference model that it can use to understand its processes. This framework allows the organization to work efficiently and yield predictable results. It also allows these organizations to monitor their progress and results with much more accuracy and consistency.
In trading, it's just as important to have a framework as it allows you to understand high level aspects of your trading that guide you toward the more refined approaches. A framework is meant to help you focus your energy and effort on specific foundational concepts that make up the core of your trade idea. It is created by an individual to help them become a better version of what they are doing, and if they lack drive, talent, critical thinking skills and the ability to observe — framework or not — they're not going to get any better.
Having a framework gives you a stable and consistent approach allowing you to weave in your personal touches on trading. Once a trader gains experience, instinct and intuition will begin to weigh in on the decision making and when the market seems chaotic or foreign, it is a traders framework that will save them. It acts as the foundation to build theories on so they can establish a sense of order when the market seems to lack any semblance of structure.
A framework can be setup for all aspects of trading- Market Direction, POI selection, Entries, Management, Risk Management. It can give you the core foundation for how to behave as a business in trading. A framework is what leads to long term profitability and consistency. Know what you will do in any situation, at any given time. Build a framework for entries and exits, how you'll manage your trades, what market indicators to stay out of the market.
Understand that a framework isn't a complete system- it's a guideline. Guidelines assist the trader in achieving their goals. It's meant to be:
Flexible- meaning it can be adaptable to changing markets.
Extensible- meaning it can grow to add new theories if need-be.
Reliable- meaning it is tried and true. It's robust and tolerant to faults.
Scalable- meaning it works no matter what size capital you're trading with.
A good framework will help you remove the noise of the market. It will take, what seems like unlimited setups per day, and give you a real reason to get in the market. It will assist you combatting the main psychological issues of the market- Greed, FOMO, Revenge Trading, etc.Build your framework and test it thoroughly. After 3 months- revisit your framework and assess what works well and what doesn't. Be flexible and adapt when needed. You should always be able to rely on a good framework.
Thanks for joining me for this Mid Session- Have a great trading week.
-BW
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3:20 PM • Sep 28, 2022