Value of Market Replay

Trader's Mindset

Dec 01

If you are reading trading books, spending excessive time reading trading forums, not making progress, or losing money in live markets then I would strongly suggest stop with that and instead hit the replay.

You can use the replay in the following ways:

  1. Use the replay to develop your market cognition without risking real money in the markets. Using the market replay is a great way to develop market cognition. Seven figure trader Mark Melnick has stated that traditional journaling doesn’t work, and I tend to agree with him.

    By using the market replay, you can get your insights, take notes, and define your setups. Next, you can backtest those insights and develop them into systematic or graybox strategies.
  2. Practicing a day over and over can give some you a range and a top line theoretical for how a given trading day’s p&l might look. Of course, it will never be the same as live and you have some foresight bias as you practice a day over and over. But, you can see that if you’re only able to say $900 with a certain lot size with all the benefits in the world and in a best case scenario that setting a goal to make $1500 wouldn’t be realistic.
  3. Learn to trade new futures markets. One reason you see more professional stock traders is they have so many markets to choose from.

    As a former single market trader, I am fairly certain that remaining a single market futures trader is a real mistake for anyone who wants to trade for a living or maximize their profits.

    There are, at least, two reasons that it is a mistake. The first is that the opportunity in different markets will ebb and flow. If you’re only trading ES then there are going to be times when the opportunity is limited.

    Another reason, you only get one maximally non-correlated trade per day per instrument.

    Psychologically it may be easier to trade multiple markets for most too. One trait that great traders demonstrate is the ability to quickly move on from a loss and move on to the next trade.

    And, that mindset is much easier to embrace when you do not have to keep trading the same market all day after losing trades. Of course, if you do trade one market, that is a benefit of having programmed setups. Programmed setups become even more important when trading multiple markets.

About the Author

The author is passionate about markets. He has developed top ranked futures strategies. His core focus is (1) applying machine learning and developing systematic strategies, and (2) solving the toughest problems of discretionary trading by applying quantitative tools, machine learning, and performance discipline. You can contact the author at