Always in the Market – Prop Shop Trading Drill #3

Trading drill


In this exercise you aim to be always in the market. This is directly in contrast to the previous exercise, as you are going to need to have a directional bias at all times, and to best manage your position based on your bias.

Trading Drill Goal

Have a position in the market for ALL OF THE TRADING SESSION. If your bias changes then you must manage your exit so you are immediately reversing your position. For example if you are working an offer to exit, you must make sure you have resting orders to go short immediately also. If you are filled on your exit but not entry orders, then you MUST hit the market to reverse your position. Coming out profitable doing this will be tough but try your hardest.

Always in the Market Review

Use the same review techniques as previous exercise to find weak points in your trade management. Some points worth noting:

  • Are you consistently reversing positions too early or too late? Always try to calibrate the payoff of collecting enough evidence to justify a reversal and waiting for too much evidence. Not collecting enough evidence will generally have you entering early for the expected move. Collecting too much evidence will result in you getting in too late and then being shaken out by the noise, even though your bias was correct.
  • Are you switching your bias too frequently? While traders need to be flexible with their bias, you also need to find the right balance of scepticism for your bias and confidence in it. This will come with experience, and this exercise will help expedite the learning process. Try and shift your focus to the bigger picture. Where are buyers / sellers going to get trapped? Where are current longs / shorts likely to cash out? Questions like these can help you broaden your short term market perspective to help you stick with a plausible market bias.
  • You may find you get caught in a loop reversing your bias, which will be obvious on your review chart and detectable during the trading exercise by your level of frustration and trade frequency. Similar to the previous point you can broaden your perspective by asking some questions. You might be trying to be ‘right’ about every little move in the market which can get exhausting.
    • One solution is to take a step back (and a few deep breaths) and just see what happens as the market action unfolds. Monitor for something obvious to change in the market state before reversing your position.

How does this Improve your Trading?

Being always in the market can be overwhelming – but it teaches you to continually consider what the immediate information in front of you presents for opportunities and acting on it. This can really help the trigger shy traders that tend to try and collect too much evidence before clicking the mouse.  You will have to really stay focused on the short term movement / motion of your market, which can teach you A LOT about market dynamics. Your PnL (on the Simulator) at the end of the session is a reflection on your market read assuming you don’t make too many rookie mistakes (see above) – and is something you should aim to improve upon the next session.  This is a good trading exercise to complete for only two to three trading sessions only, giving you one or two days to learn from, and improve upon.

Ultimately you are going to have to trade with patience, so we don’t want to pick up a bad habit in being ‘trigger happy’ in this exercise, which is why we only complete it for a couple of sessions.  Being cautiously patient in your read of the order flow and price action while considering your next position reversal is a good grounding if you are getting trigger happy.


Trading Exercise #4 – Averaging In


Trading Exercise #2 – Flip a Coin

Trading Exercise #1 – Trading Naked

– Preparation for Trading Exercises

– Introduction to Prop Shop Trading Exercises