A popular question that is often asked in the trading community is “what is the most important trait to be a successful trader?”
My answer……”stick-to-it-ness.”
What does this made up word mean you may be asking? Well let me tell you.
It means doggedly pursuing stocks, not taking them off your radar, even after their setups seem to have failed, in order to find secondary trading opportunities. Let me give you an example.
LOOKING BACK
In early September I wrote this piece, “Chesapeake Energy Basing, Could Explode Higher,” where I showed CHK in an ascending triangle pattern that looked like it was ready to break out. Here is how the chart looked then.
However the move failed.
THE LESSON IS…
At this point it was tempting to just move on to other stocks and write CHK of as a failed set up. That would have been a mistake. That would have shown a lack of “stick-to-it-ness.” And it would have caused you to miss another great set up.
CHK did in fact move back up to its resistance level, and you could then have re-drawn the rising trendline to create a larger ascending triangle. The added bonus though on this second set up was that price had already broken its 200-day moving average and that UNG (Natural Gas) had recently broken resistance as well.
MARKET ON THE MOVE
And now you have CHK making a nice clean breakout.
