The Markets were in no mood for my cautious outlook yesterday, and in today’s video I’ll be showing a sample of an almost unprecedented number of Railroad Track like patterns.
Yesterday’s action could well be a sign of the market’s intent. I would still suggest some caution because even if we’re destined for yet more new highs, I suspect it will be a bumpy ride, just as it has been of late. This reminds me of my oldest mantra which is to stick to the very best trading setups.
Confidence vs. Over Confidence With Your Trading
Something to think about:
I’ve been speaking to a number of members recently regarding their approach to the markets during these choppy times. Unsurprisingly some of them have been chopped up a bit – that’s natural and expected with the more aggressive traders.
So I asked them each the same question: “How would you have done if you only stuck to the very best looking setups that you’ve seen – say like AAPL in May this year?” And every single one of them answered they’d have done much better with far less effort expended!
This got me thinking. When you follow the rules strictly, waiting for only the best setups, it all seems too easy as the profits roll in like magic. And when those dollar signs start appearing in your eyes, impatience to trade more can get the better of you like an itch. Waiting patiently for only those best-looking setups requires huge restraint especially when the markets seem to be moving without you.
But this recent bullish market has been awkward. New highs have been followed by relatively steep retracements rather than pushing ahead, and that’s tough.
The answer is that you can do phenomenally well by doing less. It’s counter-intuitive but true. I know one professional trader who trades every single day, sometimes manically. But there’s one pattern that appears around 12 times per year and that’s the one that makes him all his money. The rest of his activity is noise and to keep him occupied!
Anyway, that’s just something to think about. The markets aren’t always friendly even while they’re rising. But it’s worth contemplating what if you did just stick to only those best setups?
