Some quick trading lessons/thoughts
These may seem very general or obvious but maybe 1 or 2 help you out.
These may seem very general or obvious but maybe 1 or 2 help you out.
Learn how to interpret charts and how to use them to judge the trend, power, and personality of a stock.
Look for accumulation clues like huge volume to the upside and tight price action
This thread may help get you started:
Look for accumulation clues like huge volume to the upside and tight price action
This thread may help get you started:
Trade with the trends on multiple timeframes.
Trends on higher timeframes overrule lower timeframe trends
Learn Stage Analysis
Trends on higher timeframes overrule lower timeframe trends
Learn Stage Analysis
Trends can be identified using moving averages as guides or looking at patterns of higher highs & lows or the contrary.
Keep it simple.
Also keep your overall charts as clean as possible. Focus on the price action
Keep it simple.
Also keep your overall charts as clean as possible. Focus on the price action
Enter at a point where you can know quickly if you are right or wrong, at a point where a large directional move can be expected
What appears expensive usually goes higher and what appears cheap usually goes lower.
The trend is the trend until it is violated.
The trend is the trend until it is violated.
You can combine price action analysis with fundamental analysis. However, only enter if the technicals and setup is strong.
Also never ignore when the technicals break down
Also never ignore when the technicals break down
Don't enter when a stock is extended from a proper buy point and it is likely to pull back with a natural reaction.
Wait for the next setup
Wait for the next setup
Focus on the leaders.
3/4 stocks follow the trend of the general market.
going against that trend lowers probabilities unless leaders are decoupling from the indexes signficantly.
3/4 stocks follow the trend of the general market.
going against that trend lowers probabilities unless leaders are decoupling from the indexes signficantly.
The leaders provide insights on the health of the market and will show clear signs before the indexes weaken or strengthen.
Again, focus on the leaders.
Again, focus on the leaders.
Study winning stocks, look for commonalities in technicals and fundamentals.
The winners from every cycle exhibit the same characteristics
The winners from every cycle exhibit the same characteristics
New leaders emerge in each new bull market, some older leaders will do well but many will underperform.
Try not to be biased by old names
Try not to be biased by old names
Look for stocks where the overall group or theme is strong. This adds to the probability of a trade working.
there will be several primary leadership groups in each uptrend, focus on trading those
there will be several primary leadership groups in each uptrend, focus on trading those
Keep watch on the new 52 week high and ath list. The leaders will be showing up repeatedly there.
Follow the volume and keep an eye out for standout price action strength.
Then look for a proper setup
Then look for a proper setup
Keep a strong daily and weekly routine that prepares you well for each trading day and keeps you in touch with the market health and leadership
think about what you can expect from each trading day with regards to the indexes and your stocks & ideas. Plan in advance how you will response
Practice situational awareness
Practice situational awareness
Preparation is key and gives you confidence.
Keep tabs on your emotions and how you are feeling, this is data you can use.
Keep tabs on your emotions and how you are feeling, this is data you can use.
Be flexible, don't be steadfast in your opinions, they will often be wrong.
You can be wrong the vast majority of the time and still make a fortune
You can be wrong the vast majority of the time and still make a fortune
focus on keeping your losses small relative to your average gains in each type of environment.
Manage risk by adjusting your exposure to different environments, activity, position size, and stop losses.
Manage risk by adjusting your exposure to different environments, activity, position size, and stop losses.
Managing risk and capital preservation are more important than your ego.
Preserve your emotional capital and mental health above all else.
Preserve your emotional capital and mental health above all else.
You do not have to trade all the time or in every market environment. Your style will have its sweet spot and weaknesses.
You don't get a medal for trading everyday, you get paid to perform
You don't get a medal for trading everyday, you get paid to perform
Your goal is a rising equity curve and a style that matches your personality and goals.
Treat trading like a business
Study your own mistakes even if they are embarrassing. You will learn the most from the most embarrassing ones
Study your own mistakes even if they are embarrassing. You will learn the most from the most embarrassing ones
Always look to improve. Subtle improvements compound over time.
Just sucking less over 10 years versus your old self can have a dramatic increase in your performance.
Just sucking less over 10 years versus your old self can have a dramatic increase in your performance.
Trade in a way that is sustainable and ensures you are managing risk and will be here in 50 years.
Preserving capital in corrections is job number 1. That allows you to profit from bull markets
Preserving capital in corrections is job number 1. That allows you to profit from bull markets
Trends last longer than you think. Respect them.
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