Spotting and Trading a Potential Change of Trend
Recognizing and then admitting a trend has changed sounds easy, but we tend to have opinions.
A potential change of trend is where money goes to die. We lose sight of risk/reward in favor of the previous order flow. Figuring out when a trend has ended is only part of the problem. Admitting it and doing something about it are not the same thing.
Whether you use stochastics, RSI, MACD, Fibonacci extensions, pivot points or just plain candlestick patterns, you need to be decisive.
When stocks trade into a range we tend to adapt to the market and change our main trend.
This sounds good in your head but becomes a future trade management problem. If you daily charts are consolidating, it’s not a good idea to switch to a different time frame for a trend.
This chart gives some ideas about committing to your strategy.
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Trading to Be Right Can be Hazardous to Your Career
Some traders just want to be right…
Losing trades drive them insane. A constant barrage of negative self-talk spirals out of control with: “What did I miss? What did I do wrong? Why did I lose money??”
If this sounds familiar, you need to stop. You need to start focusing on probabilities, not results. I know that sounds dumb, we trade to make money. Yes I know, but you are killing your chances by thinking every trade should be profitable.
Great traders focus on results over time. Break-even traders focus on the results of each trade.
We trade because we have an edge. An edge means over a large sample of perfect trades, our strategy should make money.
To become great, to become consistent, to get paid, month, after month–focus on the process of trading well. The money will follow.
Stop trading to be right. Stop trading to boost your ego.
Starting today view each trade as one of many. One of a group of perfect trades. If we make ten trades, we have no idea which of those ten will be the winners or the losers.
Stop hesitating, stop second guessing and stop trying to be perfect. Write a trading journal, pay attention, and adapt to results.
Just trade, and let your edge make you money.
[VIDEO] What to Write in Your Trading Journal During Market Hours
As the year winds down, it’s time to begin planning for next year’s trading success.
One of the biggest weaknesses I see for many traders is learning from their own experience. This aspect of trading cost me years of frustration. We all bring unique goals and resources to trading, you need to learn from each and every trade you make.
The problem for most traders? We only want to learn when it hurts.
What about the multiple lessons during market hours? The moment-by-moment decisions that cause our results.
What about the trades we earned money? Could you have earned more on the trade or the day? How would know? Who could you ask?
This trading journal video is part two of three, perhaps the most important. This video discusses what to write during market hours and how to use that information to improve.
You can watch all three trading journal videos here == >>
Mentoring | Trading Wisdom From Trading Experience
Podcast | Episode #7
What is the best beginner trading advice you would give yourself? A common question I get…
The answer may surprise you. It’s most likely the answer you don’t want to hear.
You probably want to hear about the money you can earn stock trading. If you buy a “how to trade stocks” book, you skip to the entry signal chapter. After all, perfectly timed entries create winning stock trades.
Well, to put it bluntly the answer is no.
Sure, improving your entry skills is important. You need to understand bull flags, inside candlesticks and breakout trades. You need to understand support and resistance. You need to know how to set a correct stop-loss and how to set a profit target.
These are all a part of technical analysis. But they are secondary tactics. Successful trading starts with strategy and money management. Only then do you move to tactics. A great entry into a low-probability trade is still a low-probability trade.
7 Unique Strategies That Make You a Smarter Trader.
Trader education gets a bad rap.
You pay to learn. We all do. It’s just whether we pay with time, or pay for another trader’s experience.
If you pay with time, your learning curve takes longer. Earning your trading education through trial and error becomes expensive, and let’s be honest, it’s exhausting.
If you pay for experience… if you find a trusted mentor, you reduce the cost of learning and speed up the path to success.
This new free training course, TRADING ESSENTIALS provides the foundation to earn while you learn.
Learn more and enroll for free today.