How Scenarios Fit Into Your Trading Plan 1

Scenarios guide you throughout the day as you are assessing real-time information. They provide targets, bias, and they make key turning areas clear. Scenarios are a road map to keep in sight throughout the day.

Scenarios take into account the more detailed analysis done in the pre-market which includes what happened big picture overview and what happened in the overnight session.

When the day unfolding, there should be little doubt in your mind what you expect the market to do next based on what it has already done. Either a scenario is in play, in which case you know where you are looking to exploit your edge, or the market is doing something totally different than your scenarios, in which case you are not participating. That is one of the most powerful features of scenario based trading.