By using the fractal relationships of the 10, 30, 90, and 270-period linear regression lines we get a view of how market participants on different timeframes with very different agendas are interpreting price action. We also can start to get a feel of the breath of the market’s cycles of expansion and contractions and how the extreme conditions of large stretches and tight pinches of the regression lines can alert us to the potential of some fantastic opportunities.

The next indicator we can add to our toolkit is the 30-Period Linear Regression Line, aka the “RL30”. As would be expected, the RL30 is similar to the RL10 but is based on 30 periods of price data. This makes it three times slower than our RL10 indicator. A simple difference, but the implications and uses of this simple change shouldn’t be underestimated.

This is precisely what we do in the Owl Group following Dr. Ken Long’s style of trading when we use the 10-Period Linear Regression Line (dubbed the “RL10” for brevity’s sake). We know we’re going to be susceptible to all sorts of heuristics and biases in analyzing price information, so why not have a highly effective and efficient and robust single indicator we can apply to any timeframe and financial instrument.

One thing I really love about the Kata Challenge System patterns is how robust and pragmatic they are. They are all unique to a certain type of price action while being flexible and simple enough that they can be applied to a variety of situations.

In the art of trading, self-discipline is the key to success. Drawing inspiration from the Monkey King and Guanyin, we can learn to emphasize the importance of a concise trading plan, trading in sample sets, and maintaining a meticulous trade journal. Like mastering any craft, trading requires continuous improvement and a commitment to self-discipline. By measuring progress against personal goals and staying true to a well-defined plan, traders can navigate the market with the skill and finesse of the Monkey King himself.

Knowing we were in a downward-trending market gave us an additional edge and a higher probability of the trade working in our favor. The main takeaway from appreciating the value of variation in market data is to be aware of the fluctuations in the overall market, have a reliable method to gauge and measure these variations, and develop a systematic approach to exploit them. By incorporating these principles into their trading strategies, traders can position themselves to capitalize on the dynamic nature of the market and potentially achieve more favorable trading outcomes.

Practicing sketches of chart patterns can be a very good skill for a trader to acquire. I like to use the practice of sketching trading patterns to better understand the logic of new patterns I’m studying, and also to better internalize the patterns so I can recognize them quickly.