Stock trading is easy when you follow simple trading rules.
The reason most never earn six-figures trading, is boredom, or the need to make every trade earn money. Once these hidden culprits take over our rational thinking we start to talk ourselves into trades that make no sense.
For example, the SPY continues to climb higher, and is inching closer-and-closer to a major resistance level. We start to say “It can’t go higher,” and of course it does. Today is a good example (see chart below). So we don’t buy new shares, we hesitate getting long.
Worse… We get angry and want to short-sell as price action pauses, and volume dries up (another sub < 100 million share day in the SPY today). We justify it by saying “it’s not a long because it’s near resistance, it’s slowing down and it has light volume.
All of these may be true, but that doesn’t make it a short-sale. It makes it no longer a long, at worst, a solid long with less profit potential.
Yet we ignore the person in the mirror, and place the short-sale with less shares. We think “less shares equals better idea!”
A bad idea, with less shares is still a bad idea. Fight the urge, pick a side and continue to trade that bias until a strong stock is now officially a weak stock.
Stock Trading Recap 11-3-15 | Tuesday Video
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End of Day S&P 500 Map 11.3.15
S&P 500 heat map shows basic materials strong again. The bullish trading part is still happening.
SPY End of Day Chart 11.3.15
Oil and gas strong again. Most other stocks take a breather.