To ​profit ​consistently over time, a trader needs to be able to do 3 things:

1. Make sense of economic trends and global investor sentiment
   
   
2. Determine the context of price (whether it’s ‘high’ or ‘low')
   
   
3. Interpret price action and take, manage and close trades accordingly
   

Here’s what the basic framework looks like:

​Here's what the framework looks like when all the extra bits are added:

It can sometimes be a little overwhelming to look at the entire framework as one big system…

… which is why I look at each component within the framework as it’s own independent self-contained “node”.

Market fundamentals are a node … but within this node are independent sub-nodes. The Commitment of Traders is a sub-node … just as stock indices are a sub-node. Both are unrelated and totally separate.

When I started looking at the framework like this — things became a lot less overwhelming and a lot simpler.

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