Before discussing the techniques, first allow me to talk about "environment recognition"
Before I talk about methods, please let me first talk about “environmental recognition”
But before that, are you looking at “what the current market situation is like?”
Many people learning to trade first seek the “entry method.” “Where should I buy?” “Which signal should I enter on?” They want the answer quickly. I understand that feeling well.
But please allow me to say this intentionally.Before talking about methods, please let me first discuss “environmental recognition.”If you skip environmental recognition and just memorize entry methods, you won’t become profitable. On the contrary, environmental recognition is the foundation of trading and the most important part that determines win or loss.
In this series, I will explain the core of my method—Dow Theory, multi-timeframe analysis, and the N-Wave—in order. As the first step, this time I will carefully tell you “what environmental recognition is” and “why it is the most important.”
What is environmental recognition
Environmental recognition is, simply put,“to understand what the current market situation is.”Whether it is an uptrend, a downtrend, or a range (a state without direction). It is about correctly reading the overarching flow of the market.
To put it another way, environmental recognition is like checking a map and the weather. When you go mountaineering, no one starts walking immediately. You first check the terrain on the map, look at the weather, and decide the route. It’s the same in trading: you should first grasp the market terrain before taking the first step of entry.
Skipping this “grasp of market conditions” and jumping straight to entry discussions is the fundamental reason many people fail. Entering a mountain without a map leads to getting lost. An entry without environmental recognition is the same as getting lost.