Lesson 1 | Why Ideas Come First: Techniques Are Easy, Using Them Is Hard

This lesson has a video at the top of the page. It is two minutes long and gives you the map of the whole course; this text opens the map up and adds a few examples.

In one sentence

Learning a technique is easy. Using it correctly on a live chart is the hard part, and what holds that together is the way you look at the market: your ideas.

Why ideas come first

After years of teaching, the situation I see most often is this. Someone learns to draw lines and a few chart patterns, goes back to a chart, and has no idea where to draw or which line to trust. The technique is not wrong. What is missing is a standard for deciding which line matters.

That standard is your ideas. I often say three things:

• How you think decides where your money goes
• How you think decides what you do
• What you do decides your results

So the first lesson teaches no tools at all. It sets out four ideas. Every tool later in the course exists to put these four ideas on a chart.

Four ideas in one table

The first two describe what the market is like. The last two describe how we deal with it. Lessons 2 to 4 take them one at a time, each on recent gold price action.

An analogy

Think of trading as fishing.

A beginner walks around with a rod and casts wherever something moves. An experienced fisherman studies the current and the shape of the riverbed first, sets his net where fish are most likely to pass, and waits. If no fish swims into the net, he does nothing. If one does, he watches which way it struggles.

The four ideas are "study the current and the riverbed". The tools are the net. Without clear ideas, no number of nets will help.

Two tools, three core conditions

The whole course uses only two drawing tools: Fibonacci retracement and percentage lines.

On top of these two tools sit three core conditions, which get a whole module later.

One leads to two, two to three, three to everything. 1.382 confirms a valid point, a valid point gives you a rhythm line, and rhythm lines put together are the trend you see on the chart.

The most common mistakes

1. Rushing to the tools. Many students skip the first four lessons and go straight to 1.382. They can measure, but they cannot use it, and they do not trust the levels they measure.
2. Treating the ideas as slogans. "The market moves in order" means you can know in advance where price may stop, and then watch how it reacts when it gets there. It never says price will follow your lines.
3. Thinking you can predict the outcome. This method aims for high probability. Not knowing the outcome is gambling; seeing a high-probability outcome in advance is investing. Even high probability is sometimes wrong, so every trade needs a stop.

Explain it in your own words

Close this page and try to answer three questions. If you can explain them, you have learned them.

1. Of the four ideas, which two are about understanding the market and which two are about dealing with it?
2. Using the fishing analogy, explain why you should not act before price reaches your line.
3. What question does each of the three core conditions answer?

If you get stuck, go back to that section and read it again.

Practice

Spend half an hour a day. Open a daily gold chart, pick a stretch you know well, and do only one thing: draw horizontal lines where price has stopped before. Don't worry about being right. After a week you will notice that some lines are touched again and again. Lesson 2 shows you how to draw them with more reason behind them.

How to study

The course has three stages, and every stage depends on review. Lesson 5 covers this in detail.

Next lesson: Lesson 2 | The Market Moves in Order: Cast Your Nets First. The course map is on the Rhythm Trading course page.

This course teaches a method using past price action as examples. It does not forecast prices, recommend any broker or give investment advice.