Skip to main content

Adapt to the Markets

 What works one month may not the next. Trading setups you crush one year may be extinct the next.

“old school” bounce play. Rule number one, do not be the first to buy. Let the market stop going down, and then dip your toes into the water and buy a little. Let the stocks hold higher and then when they do, this is when you load up.You only take on huge positions after the market has stopped going down and the stocks and market has held higher. Don’t be a hero and try to be the first one to catch the bottom. There is more money in loading up after the stocks hold higher.

George Soros famously warned, “The market today is dominated by much younger people who have not experienced a bear market.” Hard times were about to visit.

Remember, if you are playing for a bounce of 88.50 SPY, have a list of stocks ready to go with great prices. Near 88.50 buy just a taste of the stocks you wish to trade. Wait for SPY to hold higher. See which of the stocks that you bought a taste of are trading the strongest. Buy more of these stocks. Below 88.50 SPY, you must exit your stocks. Set plans to exit your stocks if they trade in your favor.

it is a mistake for a new trader to try to catch the bottom.

It is human nature for some traders to try to catch the bottom of the market or a stock. Some wish to be that one trader who was correct while others on the Street were wrong. Some desire to be that guy on the desk who calls the bottom and receives the adulation from other traders. But this is just ego. And trading to stroke your ego will manifest a short trading career. The object is to make money consistently. Not try to prove you are smarter than others.

scalping against the trend with really strong or weak stocks is not advisable. Scalps are for stocks that are not clearly directional. When a stock is really trending, we want to focus on where to load up with the direction of the trend. We want to focus on a big trade.

Many traders claim that you improve more during a difficult market than one ripe with opportunity like I saw my first few years. I totally agree.

 bad relationships can ruin your trading results. In this case, adapting did not mean learning a new style to trade, but rather cutting out negative personal influences. While I’m no Dr. Phil, if the dynamics of a romantic relationship turn sour, so too can your P/L.

You need a ton of experience first. Stick with support and resistance plays first.

And as a new trader, you should not be focusing on one of the harder trades with a market where it is wiser to follow the momentum.

Comments

Post a Comment

Popular posts from this blog

 Loss is painful, guilt can be devastating. Worse than losing one's dream is the knowledge that the loss was self-inflicted. Problems are solutions that have outlived their usefulness. Problems are pattern that were learned in emotional circumstances during one period of life and that now have taken an existence of their own. Many times, outdated solutions replay themselves in a variety of life situations, leaving people mindlessly repeating their mistakes in work, love, and trading. There can be no free will for people who are locked into patterns developed for past challenges. Successful traders are therapists both learn to do what comes unnaturally. The resolution to problems can be found in what people are doing when those problems are not occurring. The problem with many traders is not that they have problems, but that they are focused on their problems. It is this problem focus that prevents them from appreciating what they are doing right, that blinds them to solutions alrea...
Post a Comment
Read more

Three Choices

When we are unhappy and our Life Conditions do not match our Blueprint, we have three choices as to how we’re going to handle the challenge: First Choice: Blame The first choice people have is to assign blame, and there are three things you can blame: a) Event . There’s a story, something that happened, behind why things are the way they are. However accurate the story may be, blaming an event is convenient because it helps preserve an identity designed to shield us from our true fears: fear of failure and fear of not being loved or accepted. b) Others . “I’m in this situation because this person …” Similarly, the story may be true, but it’s convenient and gives you comfort in the moment. “There’s nothing wrong with me. It’s this other person. There’s nothing I need to change.”  c) Yourself . Most people think that this is being responsible, but blaming yourself will not make it better. There’s a difference between responsibility and beating yourself up—between “Here’s a pattern th...
Post a Comment
Read more

Wealth File #15 Rich people have their money work hard for them. Poor people work hard for their money

Working hard is important, but working hard alone will never make you rich. Rich people can spend their days playing and relaxing because they work smart. They understand and use leverage. They employ other people to work for them and their money to work for them. You do have to work hard for money. For rich people, however, this is a temporary situation. For poor people, it's permanent.. Rich people understand that "you" have to work hard until your "money" works hard enough to take your place they understand  the more your money works, the less you will have to work. To win the money game, the goal is to earn enough passive income to pay for your desired lifestyle. In short, you become financially free when your passive income exceeds your expenses. Rich people think long-term. They balance their spending on enjoyment today with investing for freedom tomorrow. Poor people think short-term. They run their lives based on immediate gratifications. To in...
Post a Comment
Read more