The Novice Trader
1.They tend to follow the crowd.Watch what others are doing
Comfort in numbers
2.They avoid taking risk unless others are sharing the risk as well.
3.They feel that if others are buying then it is "ok" for them to buy, too.
4.They act on the advice of so called "experts", i.e. the advice of market gurus, CNBC, analysts, and their brokers.
5.As humans, they tend to complicate the trading process and ignore the important simplicity of markets.
6.They always make the same two mistakes: They buy and sell after a move in price is well underway (late and high risk) and they buy into resistance and sell into support (low probability).
The Consistently Profitable Trader
1.They lead the herd.2.They tune out all the subjective noise that can get in the way of making proper trading decisions. They don’t care what others are doing and make decisions based on a very mechanical and unemotional set of criteria based solely on the laws and principles of supply and demand.
3.They learn to identify the proper entry that most people never see.
4.They buy after a period of selling and into support. They buy fear.
5.They sell after a period of buying and into resistance. They sell greed.
6.Successful traders:
Can identify opportunity before others.
Execute trading plans mechanically.
Successful Trading
1) Having the ability to find two sets of ill-informed individuals in the markets in any time frame.Those willing to sell their stock or futures to you at a price you know is too cheap. You know by objectively assessing supply and demand.
Those willing to buy your stock or futures at a price that you know is too expensive. You know by objectively assessing supply and demand.
2) Having the tools, knowledge, and ability to take the proper action when these two groups appear.
3) Play the bandwagon correctlyâ¦
Proper trading is knowing how other market participants think and react when they are correct and, more importantly, when they are wrong. Price patterns are thought patterns.
Mental Musts
1)Confidence2)Discipline
3)Patience
How to get these
1) Reduce and eliminate subjective analysis.2) Learn to fight the urge to do what others are doing and make decisions based on a very mechanical and unemotional set of rules and criteria.
The Proper Entry
Know Where To Enter, Support and Resistance.- Smart money enters here.
Entry Must Be Low Risk.
- Most important part of the trade.
Enter Before Others.
- This is how we get paid.
One of the most important things to understand about proper trading and investing is that visible confirmation and opportunity are completely inversely related in trading. In class, this is a point I focus on more than any other.
Editors’ Picks
AUD/USD stands firm above 0.6500 with markets bracing for Aussie PPI, US inflation
The Aussie Dollar begins Friday’s Asian session on the right foot against the Greenback after posting gains of 0.33% on Thursday. The AUD/USD advance was sponsored by a United States report showing the economy is growing below estimates while inflation picked up. The pair traded at 0.6518.
EUR/USD mired near 1.0730 after choppy Thursday market session
EUR/USD whipsawed somewhat on Thursday, and the pair is heading into Friday's early session near 1.0730 after a back-and-forth session and complicated US data that vexed rate cut hopes.
Gold soars as US economic woes and inflation fears grip investors
Gold prices advanced modestly during Thursday’s North American session, gaining more than 0.5% following the release of crucial economic data from the United States. GDP figures for the first quarter of 2024 missed estimates, increasing speculation that the US Fed could lower borrowing costs.
Bitcoin price continues to get rejected from $65K resistance as SEC delays decision on spot BTC ETF options
Bitcoin (BTC) price has markets in disarray, provoking a broader market crash as it slumped to the $62,000 range on Thursday. Meanwhile, reverberations from spot BTC exchange-traded funds (ETFs) continue to influence the market.
US economy: Slower growth with stronger inflation
The dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.
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