It’s difficult to not get consumed with the fast pace nature of trading. With CNBC, Twitter, and thousands of blogs pitching you the next quick buck, how can you not get trigger happy?
Sticking with your trading plan is critical to long-term success in this ever-changing game we call the stock market. Finding a trading system or approach is important before even placing that first trade. This doesn’t mean signing up for 30 different penny stock newsletters that promise daily 300% gainers or following those on Twitter preach their best performers but oddly don’t mention the other positions they took losses on.
STUCK IN A CHANNEL
For many, the S&P 500 is the index they focus the most on, it without a doubt is the focal point of many news sites and investment newsletters. The index, as I see it, is currently in a channel as it bounces between a rising trend lines. Unless it’s your intention to scalp the +/- 1% moves between the trend lines, there are few reasons to waste unnecessary energy trying to. Instead, go enjoy this fall weather, have a drink, go to the gym, or find something else to trade.
KEY LEVELS
While the index trades in this channel, we can at least note the potentially important levels to come. If we get a break to the downside, traders will likely be watching 1420 as the next level of support, after that we have the 50-day moving average and the previous short-term low of 1400. On the upside the recent bull trap break near 1470 will likely be important to bulls, if they stand a chance to keep this marketing marching.
PLAN YOUR TRADE AND TRADE YOUR PLAN
Create our own trading plan and stick to it, don’t allow the noise around you to distract you from your potential. Wait for your pitch and then swing for the fences! While a stock, ETF, or currency pair is in a tight channel or some form of consolidation, focusing on the trades you can make with the largest risk/reward is often the best use of your time.
Disclaimer: The information contained in this article should not be construed as investment advice, research, or an offer to buy or sell securities. Everything written here is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned.
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