Progressive Exposure

The concept of Progressive Exposure is often discussed among Swing Traders. I explain how I use it in the video below with a few examples.

🚦 Understanding Progressive Exposure: The concept involves gradually increasing market exposure during favorable conditions and reducing it during adverse situations, akin to adjusting speed while driving.

📈 Phases of Trading: There are two critical phases in trading: the consistency phase, where traders develop a feel for the market, and the performance phase, where they trade based on instinct and previous experiences.

📊 Static vs. Dynamic Position Sizing: In the consistency phase, traders use fixed position sizes. In contrast, in the performance phase, they adapt their sizes dynamically based on market feedback.

🔄 Importance of Trade Logs: Maintaining a trade log is crucial for understanding past performance, identifying momentum, and making informed decisions about adjusting position sizes.

⚠️ Caution Against Complacency: Traders must avoid becoming complacent after a series of successful trades and should be prepared to increase exposure when the market indicates a favorable environment.

💰 Risk Management: The importance of managing risk by adjusting position sizes according to market conditions and prior trade performance.

📝 Continuous Improvement: Reflect on their trading practices and seek improvement through consistent analysis and adaptation.