Incorporating market conditions into your trading rules
Oct 5, 2026 · 9 min · 5 segments
- Speakers
Michael MartinHost
- Show signals
- SuitabilitySafeBiasNot politicalAudience≈21k followers
Oct 5, 2026 · 9 min · 5 segments
Michael MartinHost
So, you know, I think understanding market conditions is something that's gonna take some time.
This speaks to, um, you know, when you're planning something we refer to as robustness, and the more robust, you know, your model or your trading system, the better it will serve, serve you.
What does that mean? So let's just say you're buying ten-day breakouts and selling 20-day breakouts, whatever it might be, buying crossovers.
The reason why most of us would suggest that you test that over ten plus years is 'cause you'll have different market regimes over that window of time, right? You'll also wanna know and go back and see if, you know, how did it do in '07, '08? How did it do in 2022? How did it handle 9/11? How did it handle COVID? So these types of things are kind of shocks to the system, as a lot of people can't anticipate, especially the black swans.
So since we know ahead of time we can't predict what's gonna happen through the end of the close today, right? Despite having a m- You might have an amazing feel, you can't really tell what that's gonna look like.
And so when we speak to the market environment, um, or market conditions, those are things that you can backtest, you can stress test.
Now, the, the simulators are getting much better, especially with the advent of AI.
I don't typically like to test one instrument at a time because it doesn't really tell me how the rest of my portfolio's gonna do.
So this is the point where if you're just trading MNQ, you can probably click off the video.
You know, 'cause if you're like risk on, risk off with one instrument, that's really not what we're talking about here.
We're talking about having several ideas in your portfolio at the same time, pulling your weeds and letting your flowers bloom with the money that you get stopped out on, right? When you get stopped on something with a protective stop, you have cash.
That now can become dry powder as an asset class itself, or you can do like I do, typically reinvest some of that into the names that are winning when you look at specific continuation patterns, right? So for your particular style of swing trading, you'll wanna know, like, okay, when the markets are challenging for investors, will this perform well? So that's why it's important to go back and say, "Okay, here's my style.
So, you know, I think understanding market conditions is something that's gonna take some time.
This speaks to, um, you know, when you're planning something we refer to as robustness, and the more robust, you know, your model or your trading system, the better it will serve, serve you.
What does that mean? So let's just say you're buying ten-day breakouts and selling 20-day breakouts, whatever it might be, buying crossovers.
The reason why most of us would suggest that you test that over ten plus years is 'cause you'll have different market regimes over that window of time, right? You'll also wanna know and go back and see if, you know, how did it do in '07, '08? How did it do in 2022? How did it handle 9/11? How did it handle COVID? So these types of things are kind of shocks to the system, as a lot of people can't anticipate, especially the black swans.
So since we know ahead of time we can't predict what's gonna happen through the end of the close today, right? Despite having a m- You might have an amazing feel, you can't really tell what that's gonna look like.
And so when we speak to the market environment, um, or market conditions, those are things that you can backtest, you can stress test.
Now, the, the simulators are getting much better, especially with the advent of AI.
I don't typically like to test one instrument at a time because it doesn't really tell me how the rest of my portfolio's gonna do.
So this is the point where if you're just trading MNQ, you can probably click off the video.
You know, 'cause if you're like risk on, risk off with one instrument, that's really not what we're talking about here.
We're talking about having several ideas in your portfolio at the same time, pulling your weeds and letting your flowers bloom with the money that you get stopped out on, right? When you get stopped on something with a protective stop, you have cash.
That now can become dry powder as an asset class itself, or you can do like I do, typically reinvest some of that into the names that are winning when you look at specific continuation patterns, right? So for your particular style of swing trading, you'll wanna know, like, okay, when the markets are challenging for investors, will this perform well? So that's why it's important to go back and say, "Okay, here's my style.
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