Todays Lesson of the Day: Step on the Gas when the light turns green! Yes you can make money swing trading stocks. Subscribe at Northstaractiveequitytrading to learn how and receive our stock picks. Robin Griffiths, the renowned technical strategist, once stated that “Trading is a traffic light system. At a traffic light, you wait for it to turn green and then you go. You don’t try to predict when it’ll go green.” Unfortunately, far too many investors believe that to achieve success in the stock market one must become supreme master of the crystal ball by creating a complex methodology that will predict where the market is headed. In reality, this is the absolute antithesis of what market wizards will tell you. For that reason, I think Robin’s metaphor is spot on. At a traffic light, you sit patiently with your foot on the brake; when the light turns green, you hit the gas and off you go. It’s straightforward, and the average Joe who drives generally follows this program. You don’t try to predict when the light will change; you simply respond appropriately when it does. There you have it, our trading methodology in a nutshell. We are not in the business of trying to divine the market’s direction. We are in the business of reacting to it. Wall Street is the world’s most sophisticated disinformation machine ever devised. Ask yourself how often you’ve witnessed the marketing and hype influencing the market so much more than the actual facts and data. It is exactly for this reason that we trust our charts, believing that their price and volume tell us everything we need to know to separate market noise from profitable trading signals. We watch and we wait for their signals to turn ‘green’, then we take my foot off the brake, step on the gas and just click the ‘buy’ button. What this amounts to is ‘evidence-based trading for dummies.’ That’s not to suggest there’s no skill involved. Stepping on the gas and clicking the ‘buy’ button still requires a trader to channel his or her unemotional android side. Plus there is all the resourceful stalking, position sizing and stop-setting that should go on before you trade. But the point is this: don’t allow yourself to become confounded and bewildered, thereby freezing at the intersection. Instead, when the light turns green, take your foot off the brake and step on the gas
Posted on: Sat, 16 Aug 2014 22:21:07 +0000
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