Lesson 2 | The Market Moves in Order: Cast Your Nets First

This lesson has a video at the top of the page.

In one sentence

Before price gets there, mark where it is most likely to stop, then watch how it reacts when it arrives.

Many people think the market is random

At first glance gold goes up and down with no pattern. If it really were random, no analysis would mean anything.

I see it the other way round. A single candle is noisy, but once a move is over, most of the places where it stopped and turned could have been found in advance. Turning disorder into order is the first idea.

An analogy

Think of the market as a fish pond.

If you want to catch fish, don't wander around with a rod. Cast a net where fish are most likely to pass. Once the net is set, you only do three things:

1. No fish in the net: do nothing.
2. A fish swims in: watch its reaction. Does the net push it back, or does it break through?
3. If it breaks through, look at the next net.

In trading, the net is a set of percentage lines.

On the gold chart

Look at gold's latest leg (COMEX gold futures, daily).

• On 25 August 2026 gold hit 4,755 and then fell steadily.
• On 23 October it reached 3,989.

Draw percentage lines on that fall and the nets are set before any bounce happens.

These three lines are the three gates on the way back up.

This week's bounce only reached 4,097, short of even the first net. No fish has entered the net, so we do nothing, and we are in no hurry to buy the dip.

When price really does enter a net, we watch the reaction. If it is pushed back, trade in the original direction; if it breaks through, look at the next net. That way, before price moves, you already know where it may stop and turn. A disorderly market has been framed into an orderly one.

One detail when measuring

When you measure, wicks count as price. Body or wick, if price traded there, the market is telling you something. Pull highs to the top of the wick and lows to the bottom of the wick.

The most common mistakes

1. Treating a net as certain. A net only says "price may stop here". The reaction when price gets there is what decides whether you trade.
2. Acting between two nets. The space between nets is free space for price. Chase a trade in the middle and there is no comfortable place for the stop.
3. Measuring from the wrong points. If the start and end are not on the exact high and low, every line after that is off.

Explain it in your own words

1. Explain "the market moves in order" in one sentence.
2. When gold bounced to 4,097, why did we do nothing?
3. When price touches the first net, what are the two possibilities, and how do you respond to each?

Practice

Pick a stretch of gold you know well (daily or 4-hour). Draw percentage lines on a clear rise or fall. Set the nets first, then scroll forward and see whether price was pushed back or broke through at each one. Write the results in your review notebook.

A note

The 23.6%, 38.2% and 50% levels in this lesson are the most common ratios. From Lesson 5 to Lesson 7 you will see that rhythm trading really relies on 1.382, valid points and rhythm lines; percentage lines are the tool for putting them on the chart.

Previous: Lesson 1 | Why Ideas Come First　Next: Lesson 3 | Every Move Has a Cause

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