Swing trading principle:

Not buy the dip, buy the BO with uptrend and right theme, and only during good times.
ST 的本质是在好的时段有条件地追高。
Asym 说得非常对：tech 和 indicator 的本质不是去预测行情，而是去指导和约束交易中的行为和情绪。
After all, your biggest “edge” as a retail trader is picking your spots.
Matt Caruso:
Until a real bottom is in, you don't want to buy strength or you will be quickly kicked out. It's
tricky enough to buy strength in an uptrend. Doing so in a downtrend is extremely painful.

Don’t give up on trading.

It’s a difficult skill to acquire.
It will require years of trials and errors before you get good at it.
But once acquired, that skill will allow you to compound your money for the rest of your life like
nothing else can.

Lei：市場恐慌時，不動，多數時候是正確的。
Hong Yang：今年 7 月大盘演绎与 2023 年 7 月如出一撤，看似节节攀升的行情，早已釜底抽薪，经验直觉告诉我，自 7 月 12 日减仓后
其间没有盲动，只是静静的看，默默计算 R ／R 赢亏比，评估有没有必要参战，孙子云：＂善战者先胜而后战＂。静心洞察大盘脉络，独立思考，相
信风雨过后，才能见彩虹，耐心等待。

This market enviroment is not giving me any traction and therefore my exposure is just keep
going down and down.... Better times will always come around sooner or later for those who can
keep their capital together...

Javier
One way to gauge if a market is healthy and trending is if we are above the 9/21 ema and they
are pointed up and to the right stacked in the proper order. If they aren't you should be in tactical
mode either heavy cash and sidelined or taking profits faster and taking more contrarian type
entries like undercut and rallies IF you must still participate.

Ted Zhang
$NVDA $SMCI $AMD $IBIT $ARM $LABU were my top 6 biggest trades so far YTD. Here are 3
principles I extracted after conducting a post-trade analysis:
1. Showed a profit on day one and didn't give me much pressure the subsequent days post-
breakout because of follow-through buying.
2. PROPER weekly bases and setups. When you have a weekly base, the stock has gone through
the proper supply and demand properties and changed in hands from weak hands to strong
hands and giving the stock a greater foundation to move higher without failure and for longer.
2a. theme and/or fundamentals, sound technical setup and favorable market sentiment.
3. They were ALL pre-meditated at least the day before, but often even weeks before - some even
months. Imagination and visualization are key here because when what you imagine comes to
reality, it is like you've seen it already and are ready to receive it with open arms.
On the other hand, my biggest losers (still limited to <1% ROTE) saw: 1. impulsive trades called
intraday; not premeditated 2. no proper weekly setup, theme and/or fundamentals 3. Often
forced

“Extreme ownership by Jocko Willink is one of the best trading books I’ve read. [It is in my top 10
or even top 5 books]” ~
@Qullamaggie
When people I respect and look up to make book recommendations, I buy them immediately.
Lucky enough I already own this one but haven’t started it yet. Definitely moving it up on my
reading list.

I've been trading for 41 years, during which I won two US Investing Championships with triple-
digit returns. In the 90s, (from 1995 to 1999) I made 33,500% in just 5 years. Since 2019, I'm up
over 1500%. My lifetime compounded total return tops more than 600,000%! And I can count on
one hand how many stocks I've held up multi-hudreds of percent, and I've NEVER in my life held a
stock up 1000%... and that includes buying $AMZN $YHOO $CSCO $DKS and many of the biggest
winners right off their IPO base.

Why haven’t you found “the secret” after all those books and videos and webinars? Because
there isn’t one.
Discipline
Risk Management
Situational Awareness
Process
Experience / Instinct
The real goal is longevity.
賺錢和積累財富是兩件事。多數人都能賺到錢，但是懂得積累財富的人是少數。 賺錢的方式有千萬種，但是積累財富的方式卻不多。對於普通人來說 ，
最容易做到的只有一種：複利！ 愛因斯坦說，複利是世界第八大奇蹟。誰搞懂了它，誰就能賺到錢。搞不懂的人，將為此付出代價。
Compound interest is the eighth wonder of the world. He who understands it, earns it; he who
doesn't, pays it. - Albert Einstein

Told my wife that less is more . She asked me the other day if I no longer do
my nightly "stonk prep" because I used to stay up hours charting looking for new setups every
night and now she never sees me do that. I told her that no it was different now. Now I focus on
less and more well known names. As opposed to trying to find the unknown hidden gems. I also
trade way less and am very picky about my entries. I spend less time on here throughout the
trading day and after hours. Honestly I don't even get a thrill out of trading anymore. It's very
robotic and boring at this point. Every result weather it be a great trade or a stop out is met with
the same stoic expression on my part. It's just another day at the office. This has me trading at
my best. My PnL just slowly climbs up a frozen rope. There are several reasons that this has
helped: Mental Health For one, we need our rest and staying up late every night looking for the
next one at the expense of my sleep was not conducive to good mental health. I'd often end up
waking up late and not preparing properly for the market which defeated the whole purpose of
prepping so much the night before. Distracted on Game Day Having too many names on my focus
list all going off with alerts at once was counterproductive. We need to focus on a handful of
setups. If we have 20+ names on our focus list we likely don't really know what we are looking
for. Shotgun approach is not ideal. Less is More Becoming more patient and pickier about my
entries has made me a much better trader. Often failed trades happened not because of an
invalid idea but because of bad timing. Sometimes the best entry isn't the most obvious and the
most obvious is entry is one intended to be a false move. Naturally becoming much pickier forces
you to trade less as the perfect opportunities won't arrive all the time. Increased Probabilities
Focusing on the liquid leaders helped increase my probability of success. I noticed that the lesser
known random names were less likely to make the moves I expected. By being a technician I'm
looking for big money footprints to lead the way and provide support. That's harder to do with
names that don't have much interest from institutions. Make Money Not Followers I had to be
real with myself and self reflect. Are you here to be the best twitter poster or are you here to
make money? Sure you can be in everyone's good graces by giving people all of these setups and
ideas but what good is that for you if it's distracting you from your main objective?

Feels like a no-trade-day for me... Took me a long time to realise the value of sitting on my
hands... My focus right now is on mint tea, old
@Qullamaggie
streams and just patiently stalking... If a setup and break out is super good it will be obvious and
the position will force itself into my account anyway...

Once again $RUT is going through low volatility condition and making me excited. Because it is
from those low volatility conditions that trends usually emerge. If $RUT moves higher from here,
I can guarantee you a hot summer for equities.
Trading is a business. It is a long-term business, if practiced diligently can generate income for
living. This is not a "get rich quick" scheme. This is definitely not gambling. So the next time you
see your position going through a lengthy consolidation, remind yourself this and re-adjust your
expectations.

In trading you need to be flexible and willing to chance your stance quickly. Staying nimble and
trading the price action is an underrated skill.

Singles and doubles score runs and help win games. You don't have to hit home runs to win
championships.

Emotional Resilience is so vital in trading because trading makes you feel stupid with ongoing and
relentless regulatory. That’s the nature of existence in a game that is barely more than a coin-toss
choice each time. The resulting beating yourself up over bad outcomes, then just compounds
frustrations, and so on in a viscous cycle. This is where the intellectualising of everything can
become highly problematic. This was why yesterday’s post (reposted below) resonated with so
many.
Don't let your high intelligence fool you into thinking you should be succeeding in trading. Trading
is a performance activity, not an intellectual pursuit. Success hinges less on intelligence and more
on attributes like emotional resilience, sensing capabilities, adaptability, and determination.
These qualities, along with effective communication, problem-solving and analytical skills, and a
growth mindset, play a crucial role in achieving high performance and managing the challenges
posed by trading effectively. This is why I love this quote from Victor Sperandeo (Trader Vic) taken
from Market Wizards. "The key to trading success is emotional discipline. If intelligence were the
key, there would be a lot more people making money trading".

Control your loss. Learn to manage the downside. Be good at losing small in the markets.

Asym
Just as the best time to buy stocks in general on the long side is after a multiweek or multi month
correction or consolidation, the best time to swing trade stocks is after a multi day or multi week
correction or consolidation. Qullamaggie’s general rule of thumb is a correction of 2 weeks to 2
months. The reason for this and for “letting the 10 and 20 catch up” is to allow the normal
supply/demand dynamics to play out. Just as market corrections wring out excess supply in
stocks in general, corrections wring out excess supply in those stocks, creating more viable setups
and launching points of swing and intermediate term moves.

Usain Bolt took over a decade of dedicated training, expert coaching, and strategic development
to run 9.58s. And you don’t see results in few months and give up?

It’s what you don’t do that counts. Patience is the key word. Successful trading is the art of doing
nothing. It’s what you don’t do btw the real trade opportunities that will determine your success
over the long run. You can do so much damage to your mental capital btw trades that when the
big trade turns up, you are not ready for it.

Asym:
The stock mkt isn’t a zero-sum game where one party’s win necessitates another’s loss. It’s a
cyclical game. There are periods when almost everyone wins, followed by times when nearly
everyone loses. If you can discern btw these phases, you stand to make significant returns.

Understanding the perception of reward and the reality of reward is equally important.

KK: doing nothing is the hardest thing. That’s why you need to find sth else to do. Doing things
outside the mkt when the conditions are unfavorable is an edge.

Regardless of the mkt conditions, i try to always be in the mindset of “I don’t want to put on a
trade”. It helps me only take the trades actually worth risking my money on.

Aksel Kibar:
If you want to save yourself 2-3 years of back and forth while looking for the right strategy in
financial markets:
 Stop drawing diagonal lines, including trend lines
 Focus on horizontal boundaries with min 3 touch points.
Thank me later.

Asym:
Sometimes, the best action is inaction.

Jtrader
Many traders struggle due to fear : fear of losing money, being wrong, or missing moves. Here is
how I overcame it:
1. Embrace price action as it is, not as you want it to be
2. Move from fear to confidence in your skill, knowledge and methodology
3. Lock in profits and let trailing work for you to hit targets and improve R’s
4. Prevent bad habits with disciplined process
5. Fear is an emotion, control your mind and you will control emotions.

If you don’t sell into strengh, you’ll end up selling into weakness.

“Only the best traders cut their losses without reservation or hesitation when the market tells
them the trade isn’t working” Ed Seykota

From Graham
Never buy a stock when good news comes out, especially if the chart shows a significant advance
prior to the news release.
When it's easy to find quality setups then it's risk on. When setups are hard to find then it's risk
off. A simple but effective way to analyze the market.

If simply seeing stocks move makes you press buttons you need to focus on crystalizing your
strategy - because stocks 'move' for 6 1/2 hours every week day
All the people I know with "great genes" have coincidently been training their ass off for decades.

A lot of stress in my trading turned into confidence the day I built in money management for
longevity... Nowadays if my account goes down -5% to -15% it basically flat lines... Trading
without fear is such an edge.... I always know in the back of my head I will still be doing this in 20-
30 years...

I barely got access to market today (while getting major dental surgery) but best thing to do
always is have your stops planned and exit strategy at all times. Respect thy stops. Usually in a
situation like this locking profits is part of the game. Now these stocks can go up again and all I
will do is wait for the next setup and trade it. Yes, all the algos read my stops (my broker probably
sells that info - pfof, but I stopped caring). I am still going to follow my plan and manage risk at all
times.

Many traders get caught up in trying to predict the market's next big move every single day. This
often leads to overtrading and consistent losses. Instead, focus on patience and wait for setups
that align with your strategy and offer high probability. As Jesse Livermore said, 'The big money is
not in the buying and selling, but in the waiting.'

Asym
Nice, my anticipation scans (which pull out stocks actively in a pullback or consolidation)
expanded significantly this morning rofl. This is exactly what I was waiting for. A couple of days of
pullback should set up a LOT of stocks.
Qullamaggie's rule of thumb is setups of 2 weeks to 2 months in length. When these kinds of
setups are absent or scant, it tells you things are getting long in the tooth. We want a plurality of
setups and multi-week bases, but this often requires a broader market correction to cool things
off and pull things in.
Patience is a virtue to wait for things to setup properly before getting too aggressive. If this
nascent mids/smalls rally is for real, there will be plenty of opportunities in the coming weeks.

Asym
During a broader market correction or selloff, it’s crucial to identify stocks that exhibit relative
strength and resilience. These are the stocks that retain recent momentum, hold near their
recent highs, and show constructive price action. Here’s a deeper dive into why these factors are
important and how to spot them:
Key Indicators to Look For
Retention of Recent Momentum
Stocks that maintain momentum during a market correction are often those with strong
underlying fundamentals, strong themes, or positive sentiment driving their price action. This
relative strength during the correction suggests that investors and traders continue to see
potential in these stocks despite broader market declines.
Holding Near Recent Highs
Stocks that stay near their recent highs during a selloff indicate that sellers are not
overwhelmingly dominant and that there is strong buying support. This is a sign of underlying
strength and resilience. Identify stocks that have not dropped significantly from their recent highs
or have small pullbacks compared to the broader market indices.
Constructive Price Action
Constructive price action refers to patterns that suggest consolidation and preparation for the
next leg up rather than sharp declines or erratic movements. This behavior is indicative of
accumulation, where buyers step in to support the stock at certain price levels.
Look for patterns such as tight trading ranges, higher lows, and support at key levels (e.g., moving
averages, trend lines). Volume analysis can also provide clues, with higher volume on up days and
lower volume on down days signaling accumulation.
Practical Examples and Strategies
1. During a market selloff, scan for stocks that have positive price action compared to the
broader market indices. For instance, if the QQQ or S&P 500 is making lower lows, but a
particular stock is making higher lows, that stock is showing relative strength and
divergence.
2. Identify stocks forming bullish technical patterns such as flags, pennants, or ascending
triangles during the correction. These patterns suggest that the stock is consolidating its
gains and could break out higher once the broader market stabilizes.
3. Isolate with sectors or themes are retaining strength. While some themes and sectors
will lose their momentum and fade during corrections, others will show plurality and
strength, despite the decline in the broad indices. This is your fertile ground for the next
up leg.
Conclusion
During a broader market correction or selloff, the stocks that maintain momentum, hold near
recent highs, and exhibit constructive price action are often the ones that will lead the market
once the correction ends. By focusing on these indicators, traders and investors can position
themselves to capitalize on the next market upswing.
Remember: The key to navigating corrections is not just identifying strong stocks but also
managing risk effectively. Use stop-loss orders to protect your capital and avoid oversized
positions in any single stock. With careful analysis and disciplined execution, you can turn market
corrections into profitable opportunities. As Qullamaggie said, trading stocks after a short
correction is the closest thing to free money the market offers.

Mr Low Risk
Some good quotes from my notebook:

"As a stock trader, when you strip off what feels natural and learn to do what feels unnatural, you
become supernatural."

"It is vitally important for a trader to remember that there will always be a better trade coming
along in the future for those who preserve their capital"

"The difference between a losing and a profitable trader is in the ability and true will to personal
change."

“I really dont see the value in other peoples opinions. I would rather listen to the market. The
faster you learn how to really listen to the market, the sooner your suffering will end.”

"Our main job is not to trade. Our main job is to wait."

"A trader seldom makes only one mistake. If he makes one, he usually makes two. It is the second
one that hurts. What separates the amateur from the pro is that the pro make fewer mistakes."

"Your job as a trader is to wait for the best opportunities. Money is made stalking and sitting NOT
being active & forcing a new trade each day."

"My philosophy is that all stocks are bad. There are no good stocks unless they go up in price."

"It is interestnig how the vast majority of traders try to pick a bottom to buy but would not think
of trying to pick a top to short on the way up."

"The professional concerns himself with doing the right thing rather than with making money,
knowing that the profit takes care of itself if the other things are attended to.”

"A lot of money has been lost in trying to be the first one to identify the trend. The bottom is one
day, the bull market lasts for years."

"If you are extremly confident, taking a loss dosent bother you."

"To heck witch watching intraday swings. I focus on process. Watching the account fluctuate only
creates unnessesary emotions."

"Good trading is about being a patient observer. Observe the market with calm, objective
curiosity and paitlently wait for it to reveal itself. There is NO hurry."

One of your biggest advantages as a retail trader is your ability to decide when you want to trade
and when you don't. Having only one speed - trade trade trade trade - gives away this advantage
completely.

You must understand the following: In order to master a field, you must love the subject and feel
a profound connection to it. Your interest must transcend the field itself and border on the
religious.
Trading Psychology: An
Interview With Mark Douglas
The following is an edited transcript of a live TraderTalk conversation between Mark Douglas
and TradingMarkets CEO Larry Connors on Thursday, August 8, 2002.

Larry Connors: With me today is Mark Douglas, author of “The Disciplined Trader,” a book
that’s been around now for almost a decade and one of the most popular books available to
traders, on the mental side of trading.

He also wrote the very popular, “Trading In The Zone,” and created a video course, “How To
Think Your Way To Consistent Results.” Today, Mark and I are going to talk about how to
improve your trading results. Mark, thank you for being with us.

Mark Douglas: Oh, thank you, Larry.

Connors: I hate to bring up almost a negative question to begin this, but I think it’s a very
important starting point. Trading is obviously a very difficult game and it takes quite a while to
succeed at it, but a number of people don’t end up succeeding. Can you give us some of the
reasons you’ve seen in the past — why many of these people failed. Why did they fail?

Douglas: Well, Larry, you’re asking me a good question — I wrote two books on it. (Laughs)
Anyway, I can answer that. I can sort of encapsulate it down to at least four primary issues
that people have to look into and address.

First of all, you said that trading takes a long time to master. You did make that statement and
interestingly enough, that is one of the reasons why people fail. It’s because they don’t
recognize just how much time, how much effort, how much real sincere dedication they have
to put into mastering these skills.

And one of the reasons people don’t generally do that and take for granted many of the things
they have to learn, is because when you really get right down to it, and I think this is
something that I even started out saying when I spoke at your conference last year, is that
you need, a person, a particular trader needs absolutely no skills to put on a winning trade.
You don’t need to know anything. In other words, you can put on a trade, find yourself in a
winning trade, find yourself in a huge winning trade — and what did you need to know to do
it? Nothing.

Connors: Yeah.

Douglas: And you can see, Larry, the thing is if you can put on one winning trade without any
skills whatsoever, then you can put on two, and if you can put on two, you can put on three.
But there’s a problem here. Because people can so easily find themselves with a pile of
money after a few seconds or a few minutes or a few hours, it seduces them into believing or
thinking that trading itself is easy.

In other words, here is the difference: You need no skills to put on a winning trade but if you
want to create consistent results, if you want to master the skill of creating consistent results
from your trading, then you’re looking at what could be a lifelong process of learning, because
there are a number of different skill areas that have to be mastered. The problem with these
skill areas that have to be mastered is that most of them are psychological in nature. In other
words, I’m going to break it down into four major categories:

1. First, people have to learn how to read the market, meaning that they have to be able
to discern when the market’s giving them an edge. I’m simply defining an edge as a
higher probability of one thing happening over another. 2. The second thing, which is
extremely difficult, is training their mind to think of probabilities. Now the problem here
is that the market exists in a probabilistic environment, meaning that if technical analysis — if
I am going to look at the market from a technical perspective, one of the things that technical
analysis does for me is it identifies these patterns that continually repeat themselves. And this
even goes to back to what I said about being seduced about how easy trading is. In other
words, if I don’t have to know anything to put on a winning trade, I discover technical analysis
which identifies all these patterns that repeat themselves over and over again, in every single
time frame, then what that does is make the market like this never-ending stream of
opportunity in which to enrich myself. But there is the big problem here — it’s that patterns
imply consistency, but — and it is true, these patterns do repeat themselves — but the
problem is that there is a kind of a paradox: The patterns repeat themselves but the outcomes
to the patterns are not consistent, meaning there is a random distribution between wins and
losses on any given set of variables that define an edge. And the big problem here is that our
minds are specifically not designed to think that way. Meaning that I have to train my mind to
think in probabilities, even though I may understand the nature of probability. I may
understand the concept, but actually thinking in probabilities is another matter entirely — and
people take that completely for granted.

Connors: Mark, let’s bring that out. I love what you’re saying here — it’s the truest thing. How
do you get to that point of thinking in probabilities? I guess it has to stem from number one is
that you have to know that you have an edge, because otherwise you’re not going to be able
to withstand part two, which is thinking in probabilities — meaning that you are going to be
wrong four, five, six times in a row, potentially, with your methodology.

Douglas: Sure. How do I get to that point? This is something that “Trading In The Zone,”
really addresses in great depth and detail, as well as the tapes. As a matter of fact, the
videotape program does it better than the book itself, but basically what it boils down to is
making a commitment to use your trading as a means to acquire certain mental skills, as
opposed to continually focusing on just making money. What the tapes and the books do, for
example, is help you understand why it’s so imperative that you set up a regimen, an actual
test… let me back track and say that one of the problems is that when you have acquired
these mental skills I am talking about, like thinking in probabilities, a person is always going to
be susceptible to making trading errors.

What’s a trading error? It’s like getting in too soon, getting in too late, not taking a signal when
it presents itself, not putting a stop in, or moving your stop, or taking your stop out of the
market. I mean, there’s any number of ways that people can screw this thing up and the
problem is that even though it takes nothing, no skill at all, to find yourself in a winning trade,
the problem with creating consistent results in many ways is an endeavor in eliminating your
susceptibility to making all these different errors.

Because as long as you are susceptible to making one error, if you think about it, you are
always just one trade away from disaster. So no matter how good the results that you may
compile over any period of time, if you’re susceptible to any one error, you are always one
trade away from financial and emotional disaster.

Connors: Mark, by one error, do you mean the one time that you just don’t… adhere to your
stops…

Douglas: That’s right! It just takes one time, Larry, that’s all. All of us who have been trading
for a long time, know that.

Connors: It’s certainly the worst thing that can happen to you. I think it’s almost worse to be
rewarded for making that mistake — so you don’t put in your stops, the market ends up
reversing itself and you end up being OK. It’s rewarding for breaking the rules. It’s the worst
thing that can happen…

Douglas: Exactly. What you said is just huge, because many times what will happen is that
people will break their rules, will in essence make what is considered from the perspective of
“my desire is to create consistent results.” If you look at it from that perspective, you’re
making a trading error, and then the market rewards you for making that error.

Connors: Yeah.

Douglas: Here is the essence of it, this is what I mean — I’m kind of connecting this with
thinking in probabilities. The essence of thinking in probabilities is staying in the “now”
moment, meaning that you have to understand that even though the market generates
behavior patterns, that when we look at charts, what we see are lines, OK, and we see
various ways of analyzing the lines, you know, mathematical or we can identify a certain
pattern, but basically at the most fundamental level, the market exists on up and down ticks.

The up and down ticks form into patterns. Technical analysis identifies the pattern. The
patterns repeat themselves, but here’s what people don’t really grasp: Under the patterns are
people. The problem is that the people whose behavior generated the last pattern, are going
to be different from the people who are generating the pattern that exists in this moment. The
pattern itself may be exactly identical but the people are different.

Connors: That’s why the outcome is different.

Douglas: That’s why the outcome is different, e.g., if I really believe (now think about this), I
really believe there is a random distribution between wins and losses on any different set of
variables that define an edge, then how can I make any one of those trading errors that I
mentioned previously?

You see, every error that we are susceptible to making in that category of not having
mastered how to think in probabilities, every error is the result of thinking we know what’s
going to happen next. Think about it: Every error that falls into the category of not having
mastered how to think in probabilities is the result of “I think I know what’s going to happen
next.“

Connors: So how do you overcome that?

Douglas: By going through the process of learning how to think in probabilities. In other
words, training your mind to believe, literally to believe, that every moment is unique. That’s
what it means to stay in the “now” moment. That’s why it’s so ‘Train your mind… to
difficult to master trading itself, because, as I said, no matter believe that every
how good you get at technical analysis — and there are moment is unique.’
people out there who really, truly are masterful technicians, but as traders, they are the worst
imaginable because they haven’t learned to think in probabilities. Because their mind set is so
steeped in “I know what’s going to happen next.

Connors: Is it a need to be right?

Douglas: Oh sure, a lot of it is. Look at how we grow up — what it means to be wrong. It’s all
based on pain of every single one of us. So what we have to do is take trading out of the
“right or wrong” context. It doesn’t have anything to do with being right or wrong. This is the
process of identifying edges. And doing exactly what you need to do, when you need to do it,
without hesitation, without reservation, without mental, internal conflict.

Connors: Yeah… yeah. OK, what’s the next step here? You’ve listed two things here.

Douglas: Then the next big category is a big one (sighs).

3. The third thing is (even though you may have, let’s say mastered the first two) learning
how to identify a good edge and learned to think in probabilities — you may still be
susceptible to self-sabotaging beliefs. What do I mean by self-sabotaging beliefs? Well,
think about it, all of us have a sense of self valuation, like a sense of net worth. What are we
worth, as people? And the easiest way, although for the purposes of this conversation,
probably not exactly the best way, but just to make it easy, as I said…
If we had a way of categorizing every positive experience that we’ve ever had in our lives, and
listing them on one side of a ledger and categorizing every negative experience that we’ve
had in our lives on the other side of the ledger — and let’s say not every negative experience
contributes to let’s say, “I’m not a deserving person” but it has the possibility of doing that.
Most of them do. And we could just balance it off — how much negative, how much positive
— we would come up with a net sense of self valuation. It could be a net positive or a net
negative — and it changes, too. It’s not a static figure, you might say.

One of the problems is that once people acquire the skills necessary to create consistent
results, it doesn’t necessarily mean that they have the sense of self valuation that allows them
to accumulate vast sums of money — or the amount of money
‘People… will be
that they’d like to have. And so what will happen is that as susceptible to self-
their equity curve starts to rise, they will be susceptible to self- sabotaging kinds of
sabotaging kinds of errors. They end up maybe doing things, errors… (to) rectify the
internal imbalance…’
even unconsciously, things that they stopped doing maybe
months or maybe even years ago for that matter, or just little things like putting in buys for
sells, sells for buys — anything that will cause them to make an error that will in essence, you
know, rectify the internal imbalance that’s the result of accumulating too much money — or
more money than they believe they’re worth.

Connors: So if someone believes, for argument’s sake, they should not be a billionaire or
millionaire…

Douglas: Exactly…

Connors: Ultimately as they start approaching that level, what happens?

Douglas: Unconscious things will happen. By “unconscious,” meaning that until they develop
ways of monitoring their stream of thought so that they know when they’re thinking a
distracting thought or that they know that they are susceptible to making an error — in
essence they will sort of wake up and find themselves in a trading error.

Connors: I know this is very difficult in a 40-minute interview here, but give a couple of
broader examples of how you overcome that.

Douglas: Becoming self aware and going through a process of self growth.

Connors: And how do you do that?

Douglas: Larry, there’s a lot of techniques. I mean, it’s not an easy thing to describe in just a
few minutes, but let’s say in the workshop tapes and in my books — but most all the
workshop tapes, there are many techniques that I give people on how the implications of
things we’ve learned to believe and how to identify our beliefs. And then how to change them,
how to neutralize some of these self-sabotaging beliefs. Specific techniques on how to do that
— and then I give people a list of several beliefs that they can install that are, let’s say,
consistent with their desire to be a millionaire. Just because one desires to be a millionaire —
you can have an intense desire to be a millionaire — but like I said, if your beliefs are not
consistent with your desire, then, you know, what’s going to happen is there is going to be an
internal conflict. That internal conflict is going to result in devastating trading errors.

Connors: Does auto suggestion work?

Douglas: I don’t know exactly what you mean by “auto suggestion,” but if you’re talking about
self hypnosis or hypnosis tapes, there are a lot of good techniques out there, but one of the
best techniques as far as I’m concerned is just learning how to become self aware, meaning
that there are certain mental techniques that you can practice on a daily basis — there’s like
10 or 15 meditations. You can call it a meditation — I call it a simple mental technique —
where people learn how to become self aware. Just like great athletes. They have to stay
focused. And that’s one of the characteristics that separates a great athlete from, you know,
just like your mediocre athlete or someone who doesn’t make it into pros or make it into the
higher echelons of achievement. They can stay focused. What does that mean — to stay
focused? It means exactly that. Your mind — what you’re thinking — your body and your
mind — and let’s say, your spirit — are all focused on accomplishing a certain task, whatever
it is. Any thoughts that run through your consciousness that are conflicted with that desire is
going to detract from your outcome, right? Well, it’s the same thing with trading.

Connors: It’s interesting that you say that because it reminded me of Jimmy Connors saying
that there is no physical or ability characteristic differences between the guy who is ranked
number 1 vs. the guy who is ranked number 20 in the world of professional tennis. Obviously
from an earnings basis it was enormous but from their ability to perform and execute, there
was no difference. I mean it was simply down to the difference in the mental process.

Douglas: Right. How well they can stay focused. How much they believed in their ability to
win

Connors: Yeah, yeah. And that belief system became the difference between the guys that
were ranked number 1, 2 and 3, vs. the guys that were ranked number 18, 19 and 20. And
you say it’s the same thing with trading?

Douglas: It’s exactly the same thing. As a matter of fact, trading really is a vehicle that gives
really anybody out there the opportunity to achieve at Michael Jordan levels. You don’t have
to be born with a Michael Jordan body to be a Michael Jordan trader.

Connors: Most of us spend our time looking for edges within the patterns, etc. You’re saying
that’s fine but where you should really be spending your time is working on the mental
process.
Douglas: That’s right, because no matter how good you may become at defining edges, if
you’re susceptible to making trading errors which is a result of not having learned to truly think
in probabilities, what difference does it make? You’re going to create a nice equity curve and
one error is going to take it down 50%, 75%, and you’re going to start the process all over
again.

Connors: Now, you’re not going to know that you’re making these mistakes without — I know
you’re a big believer in keeping a journal.

Douglas: Oh yeah, keeping a journal is really big. That’s part of the process of learning how
to become more self aware. Connors: And that journal — what should be in a journal? What
advice would you give to someone to keep in that journal?

Douglas: Well, one of the things I do for example, just dealing with my own trading, is I grade
my trades. I grade my entries, I grade my exits on longs, I grade my profits, and I give myself
“A,” “B,” “C,” “D” or “E” trades, you know.

Connors: Do you do that every day?

Douglas: I do that on every trade, not every day.

Connors: Wow. OK. And before you get there, do you have a checklist for yourself so you
know exactly where you should be buying, where you should be…

Douglas: I have like a checklist that’s laminated as if I was an airline pilot. For example, no
matter how many times they do it, no matter how many thousands of times or hours they
might be in that cockpit, you know, all it takes is one little mistake. I remember several major
plane crashes were the result of them forgetting to put the flaps up or down, or something like
that. Some little thing they’ve done a thousand times and that’s why they have to read the
checklist.

Connors: You use the checklist for every trade?

Douglas: Yeah… absolutely! Otherwise… see, the fact that I stop using the checklist, what is
that telling me? I’m setting myself up for a trading error. That’s probably telling me that there’s
some conflicting beliefs inside of me that’s causing me to want to give my money away.

Connors: So the reason why people don’t use checklists is in a sense it’s this conflicting
behavior then, that they really just don’t want to be…

Douglas: They don’t want to confront it. There’s a good reason why. If you don’t have a way
to put all of this in the appropriate context, Larry. If you don’t really understand the process,
you really don’t understand this process, I mean a lot of it is scary and so you don’t really
want to confront it. You don’t really want to be taking responsibility for all this because then it
falls into the category of, “I must be a bad person,” or “There must be something wrong with
me.” You know, and so you avoid the responsibility instead of in fact embracing it.

Connors: You know, a lot of us also pride ourselves — and I suspect that just about
everybody who is listening to this has achieved some success or a lot of success in life — on
our ability to be making decisions on the fly, and we try to use that same type of thinking, you
know, good decisions on the fly — when you’re running a business, you’re making decisions
constantly. Over time, you’ve successfully made good decisions. But with trading, that doesn’t
work. You need to be doing the thinking ahead of time and then just executing off the check
list. The pride should be in the fact that you put that checklist together and you have the ability
to follow it.

Douglas: Exactly. You hit the nail right on the head.

Connors: OK, now you’ve listed the three things…

Douglas: The fourth one is — this one is really hard too. (Laughs) They just get harder as
you go down the list: 4. Learning how to identify when you’ve crossed the threshold into
euphoria.

Connors: Tell me what that means.

Douglas: Well, as traders we need to be relaxed, basically carefree state of mind. Carefree in
the sense that there are no internal conflicts that are preventing us from doing exactly what
we need to do, when we need to do it. But at the same time,
‘Everyone has a threshold
you know, like everyone has a threshold from when they go where they go from
from normal confidence to a state of euphoria. And in a state normal confidence to a
of euphoria, the problem is when we’re interacting with the
state of euphoria.’
market in that kind of mental state of mind, it’s a state of mind in which we have completely
lost our ability to perceive any risk at all. In other words, in a state of euphoria, nothing —
absolutely nothing — that we don’t think is going to happen can happen.

Connors: You’ve been rewarded because you’re living in a world of probabilities — you’re
going to be rewarded four, five, six, seven times in a row and it has nothing to do with just
how smart you are — that’s just the probabilities.

Douglas: Yes, that’s right and you may have crossed that threshold and slipped into a state
of euphoria and it is that next trade that’s coming down the pike that isn’t going to work. The
problem when you are in a state of euphoria is that you are really susceptible to making huge
catastrophic money management errors.

Connors: You increase size; you become sloppy in your decision-making processes? It all
comes back to your checklist. If you’re just looking off the checklist, you can’t get into that
state if you’ve checked everything off.
Douglas: Exactly! Right. In other words, you’ll know, “Oh, I know what’s happened here. I’ve
kind of slipped into a state of euphoria because I want to break my rules.”

Connors: Yeah, yeah. I’ve told the story before of Sheldon Natenberg who wrote a wonderful
book called Options Volatility And Pricing that I highly recommend — it’s been around now for
about 15 years and it’s been in multiple editions. He told me the story once where he sees
guys coming down to the floor and on day one, they are really impeccably disciplined. They
trade one module and they make a little bit with one. They then trade twos and they go up to
fives, and then tens. Then, all of a sudden, they go in and plunge into 50s or 100s. And the
next time you see them, it’s usually when you’re out there hailing a taxicab and they’re driving
the cab. And he says he’s seen this over and over again, after a couple of decades on the
floor, where guys end up, because they had some wins there, they end up losing all their
discipline and just blowing up.

Mark, of the four things you mention here that you listed: “1. Read The Market; 2. Train Your
Mind To Think In Probabilities; 3. Stop The Self-Sabotaging Beliefs; and 4. Identify Crossing
The Threshold Into Euphoria” — is “Stopping Self-Sabotaging Beliefs” the most important?

Douglas: No, I’d say thinking in probabilities is probably the most important. The most
important one is training your mind to think in probabilities, because once you’ve done that,
then everything else is pretty easy. Much easier, as a matter of fact — I’d say pretty easy. But
a lot of things fall into place if you’ve gone through the process of training your mind to think in
probabilities.

Connors: OK, let’s spend the last couple of minutes here talking about that since it is the
most important. Is there a way to begin this training process?

Douglas: Well, again, Larry, in a few-minute interview, it’s kind of difficult but basically what I
do is I tell people to decide on an edge. What they have to understand is that it doesn’t really
matter how good the edge is, or — as a matter of fact I would say it’s optimum if the edge
basically breaks even, you know, over a series of trades — and if it pays for commissions,
that’s even better. But what’s important is that the edge has to be specific; the entry has to be
non-subjective — in other words, the market is telling you this is an edge — and if the
variables you use to define it aren’t there, then it is not an edge. And basically, pre-define
your risk, pre-define your profit, and go through a series of trades and do the best you can to
do exactly what you need to do, when you need to do it. And do it until you can do it with no
mental conflict whatsoever. In other words, every time that you don’t do what you’re supposed
to do when you’re supposed to do it, it’s going to be the result of thinking you know what’s
going to happen. There is no other reason.

Connors: Mark, what just popped into my head — is it advantageous to have a coach with
you, or for you? Where you buddy up with another trader or something and you go back and
forth to make sure you’re just each watching each other?
Douglas: I would say that anything you do in that area, any idea that people come up with
like that, about 1) see a coach, or 2) buddy up with somebody, you know, if there’s a positive
synergy going on, then that’s great. That’s the real determining factor.

Connors: And it allows you to make sure that at least — it’s almost in a sense that you’re
answering to someone else. I think many times, people do perform better when they’re forced
— not forced — but in an environment where they’re accountable to someone else. That
probably plays a great role in this thing.

Douglas: Sure. See, the thing that you want to do with this exercise, is you want to confront
every, let’s say, conflicting belief that you may have about the nature of trading will come out
when you have to do exactly what you need to do based on your system. In other words, you
will be confronting every single one of these mental conflicts and what you do is do the best
you can do. That’s why I grade myself on each trade. In other words, how many “A”s did I get
on entry? How many “A”s did I get on exits with a profit? How many “A”s did I get on exits at a
loss? And, you know, based on my grades, I put more effort and more focus in the areas that
I am lacking.

Connors: Right. And ultimately if you have a checklist in front of you, though, you’re going
“check, check, check, check,” there’s no wiggle room there. You should be getting “A”s on
everything.

Douglas: Unless there’s a conflict, Larry. That’s the whole point. This is a process of
changing your beliefs. You see, the thing that would cause someone not to follow their
checklist or not to do exactly what they need to do when they need to do it, is something
inside of them — some way that they define reality — is in conflict with what they need to do.

Connors: Yeah, yeah.

Douglas: So in essence, by doing this kind of an exercise, you are confronting these beliefs,
so when you step through them, in other words when you are able to go ahead and do what
you need to do anyway, what you’re doing — it’s like any habit that you want to acquire —
you’re building a positive credit until there’s more positives than what was conflicting and then
it just becomes who you are. Eventually, you’ll get to the point where you are able to do
exactly what you need to do, when you need to do it, without any internal conflict.

Connors: But you’re basically warning us ahead of time that to do is like breaking any habit
— whether it’s quitting smoking or whatever — there’s going to be some pain involved on the
way to get to that point.

Douglas: Yes, some people might do it in one or two sample sizes of trade and other people
might take a year. You know, it might take them 300 trades before they get to that point. But
once they get to that point, everything changes. Everything.
Connors: And it changes for the positive.

Douglas: Oh yes.

Connors: And that’s when they can start…

Douglas: That’s when they can start making subjective decisions if they want about certain
trades that they want to put on. Once they’ve developed these skills, you know, and they’ve
neutralized all other conflicts, then they can trade as subjectively and intuitively as they want.

Connors: OK. This is great stuff and again, a lot of this information — or most of this
information — can be found to some degree…

Douglas: Not most — all of it, plus 14 hours more —

Connors: In your video video course “How To Think Your Way To Consistent Results“ and
some of it is also available in “Trading In The Zone.” This is great. Mark. Again, it’s been a
pleasure. Thank you.

Mark Boucher: The Midas

Touch
The trading industry is full of great stories. Fortunes made, fortunes
lost, big money and big egos make for a colorful business filled with
a long list of legends and tall tales.

Trader Mark Boucher’s story is no exception–and it’s true. His Midas

Trust hedge fund, which he’s been managing since 1992, was
recently ranked number one by “Nelson’s World’s Best Money
Managers” for its five-year average annual return of 26.6%. But
Boucher’s success as a hedge fund manager is only one part of long
trading career that started with a bang when he was still in high
school.

After a $100,000 trust that had been set aside in a “nifty fifty” fund
for his future had dwindled to $10,000 as the stock market crawled
to its 1972-1982 bear market lows, Boucher, age 16, decided he
needed to learn something about the markets. (He compares the
star-crossed nifty fifty funds of the day to today’s NASDAQ 100, by
the way.)
“That’s how I got interested in investing,” he says. “I figured out I
had to make that $10,000 go an awfully long way if I wanted to go
to college.”

So he hit the books, trying to learn everything he could about the

markets while saving money from odd jobs. When he felt he was
ready, he took the plunge–with some remarkable results. He
inaugurated his trading career by putting his nest egg almost
entirely into call options on gold stocks at the beginning of the gold
bull market in the late 1970s, turning $3000 into around $50,000 in
six months or so.

It was pretty heady stuff for a teen-ager, but it didn’t last for long.
Emboldened by his initial success, Boucher turned to increasingly
risky trades in commodities, quickly giving back half his profits
before realizing he’d been “fairly lucky” the first time around.

He had some amazing moments, though. The day gold hit its peak
around $850, Mark Boucher, at age 18, was a millionaire on paper,
but the market immediately went limit down, and by the time he
was able to extricate himself from the trade, he was left with a
$20,000 profit. Such wild successes and equally eye-popping
failures were typical of his early career, but it was not the way to
build a future, Boucher knew.

“I realized this wasn’t the way to do it,” he says of his early, volatile
forays into the markets. “Basically, I learned what differentiates
great traders from good traders or mediocre ones is their ability to
make money consistently with relatively low risk. My focus was to
figure out what these traders had in common and how I could use it,
because I had to have enough money to pay for school, and the wild
fluctuations were driving me nuts.”

He majored in economics at the University of California at Berkeley,

from which he graduated with honors, and had learned his first
lessons well enough to essentially pay his way through school by
trading. After graduating, he had enough money to trade his own
account full time, and did so successfully, day trading for about a
year until it turned into a bit of a “grind,” as he says. Even though
he was making a good living, he wanted to try a different approach.

In the mid-1980s, public speaking engagements brought him into

contact with other traders who were interested in his work. He
embarked on a nearly three-year research project (while continuing
to trade) with Stanford Ph.D. and Professor Tom Johnson and others.
Using the university’s top-flight research resources (including ample
graduate students), they performed a comprehensive study of
trading and investing strategies.

The goal: to find out what worked consistently on a risk-reward basis

in the markets. They looked at everything–fundamentals, technicals,
liquidity cycles. They researched anything that was quantitative
enough to be subjected to mechanical testing, using a vast array of
markets and time frames to ensure rigorous results

It was not just academic research they were engaged in, though.
When they realized the strength of some of the trading ideas they
developed, Boucher and some partners decided to put to them to
work in the markets, starting a fund in 1989 that they traded until
1991. In 1992, Boucher started his current funds, Midas Trust and
Midas High Yield Trust. He describes them as “global asset
allocation hedge funds” that cover a vast number of array of asset
types.

Mark began by describing the kinds of trading approaches he

developed through his research and what drove them. His basic
principles are straightforward, emphasizing market selection to find
the best trading opportunities and risk control to make the most of
them.

What were the practical results of your research in terms of

the kind of trading approaches you developed?

We came up with many different models–for equities, commodities,

currencies, bonds. Even though all the models weren’t necessarily
technical, they almost all had a technical aspect–a price or
quantitative base-as a screen. One thing we found by analyzing a lot
of good fundamentalists, it seemed that their performance was held
back by the fact that they had large positions in things that just
weren’t moving for long periods of time. Applying a technical screen
can really help improve that type of approach.

What were the basic principles these models were founded

on?

One of the things we found about traders who did well consistently,
was that there were many people–like a Peter Lynch or a Warren
Buffet–who would have extremely good performance when their
asset class was doing well, but they would do very poorly when their
asset class wasn’t doing well. People don’t realize that Warren
Buffet had 50 percent declines in his portfolio in the 1970s.

That wasn’t the type of performance we were looking for. The

people who were more consistent regardless of the environment
were looking at a much broader of asset classes than just one or
two. That’s why I look at such a wide variety of markets for trading
opportunities.

It’s a multi-layered approach. I use a number of different models–

ones that determine which asset class to emphasize, others to
determine how to profitably invest in those assets, and then
different types of timing models.

What would you say is the defining characteristic of your

trading approach?

I try to ‘cherry pick’ the easy part of a price move. You know, you
can have the first 30 percent of a move and the last 30 percent of
the move, all I want is the safe 40 percent in the middle.

I trade when technicals are very strong, when liquidity analysis

points in the direction of the trade, when there’s good valuation and
good relative strength–in other words, when a number of things are
suggesting a particular trend will continue. And as soon any of these
start to melt away, I reduce my position. That doesn’t mean the
move is over, it’s just that my goal is to find the safe part of the
move.

What kind of time frame do you like to trade in?

I operate on multiple time frames, but most of my positions are at

least multi-month. But my models can also help me zero in on
markets to trade on a short-term basis, as well. I do some day
trading, for example, although it’s not my primary focus.

What do you think is the most important aspect of

successful trading?

The most important thing is to think about risk in addition to reward.

It’s a problem most investors are going to have to come to grips
with in the next couple of years. Right now, the average investor is
focused on return and not even thinking about risk. But over the
long term, risk is more important than the type of return you’re
trying to get. You can have a 50 percent return one year, but if you
have a 30 percent decline the next year, you’re not going anywhere.

Most investors right now are using the buy-and-hold philosophy,

thinking the market is going to go up forever. I’m much more
comfortable using some kind of timing model to help potentially
take away the risk of negative periods in the market. By doing that,
you can create long-term performance with the same sort of return
as a buy-and-hold approach, but with much lower drawdowns-lower
risk.

As far as I’m concerned, that’s the way the typical stock market
investor should be approaching the market. They need to be more
cautious about avoiding negative periods, especially in the market
environment I think will evolve over the next five years.

The bottom line is, using a timing model can help investors sidestep
some of the negative market periods. Sometimes that means you’re
not participating in an up move, but what you’re really looking for in
investing is the best return you can get with the risk you can handle.

What do you think qualifies as a good risk reward ratio?

For a good manager with a ten-year track record, an average annual

return the same size as the maximum drawdown over that period is
very good performance. A fantastic manager might have a return of
three times drawdown.

We’d lose a large percentage of our client base if we had a 20-

percent drawdown. Our largest drawdown was around 8 percent,
and our average annual return is in the 30s. Basically, we’re trying
to keep drawdown below 15 percent and have average returns that
are at least that high.

Besides risk control, are there any other basic, effective

concepts you think most traders tend to overlook?

The other things investors could do is look at the short side as well
as the long side, and think in terms of “paired” hedging
opportunities, where every time you’re going long one market,
you’re going short another-long Dell and Gateway, instead of just
long Dell, for example.
Also, most investors are not very prudent about stock selection. I
have many criteria for selecting stocks on both the long side and
short side of the market.

So, what attracts you to a particular trade or market?

In equities, I’m looking for stocks with good relative strength and
good earnings momentum, and I also apply some value criteria-
ideally, stocks selling at 70 percent or less of their expected growth
rate or past growth rate, and stocks with still-accelerating earnings.
They should also be leading technically-breaking out of trading
ranges, for example, where I can go in and establish a relatively
low-risk trade, placing a protective stop below the low of the trading
range.

In the futures markets, I do a lot of sentiment work, including

Fibonacci timing and volume accumulation–I like to have a lot of
different tools pointing to the trend I see developing.

Would you describe yourself as a mechanical trader?

I have many mechanical systems, and I trade some of my money

with them, and I also try to put a lot of them together to smooth out
performance, but I also try to look at the bigger picture and improve
performance by using my brain. Even deciding how to blend and
apply mechanical systems can be a discretionary process.

There are times, for example, in the commodities markets, when

you can see the economic environment is shifting in a particular
direction globally. Right now the commodity market trends are still
down, and the leading economic indicators of every country except
the United States are basically turning down–so there’s still a
likelihood that you’ve got a trend in force, and you can probably say
that you’re either going to trend down or experience a fairly sharp
shift into an uptrend. So, you could conclude that trend-following
models in the commodity markets should be working fairly well, and
you’d use a mix of those.

You’ve mentioned that much of your trading is longer term.

Can you shed some light on your shorter-term ideas?

The things I’ve got on TradingMarkets.com are more short-term.

First, there’s the Top Relative Strength and Earnings New Highs list,
which contains stocks with strong relative strength and good
earning per share, among other things, that are making new highs.
It shows which stocks are “running away” and would be good
candidates for long trades.

We can look at these everyday so we don’t miss a breakout in a

stock with strong potential. It also allows us to pick stocks where
can go to an intraday type pattern and get in on a breakout move
with much lower risk.

I’ve also got a corresponding list called the Bottom Relative

Strength and Earnings New Lows list, which shows stocks with low
relative strength and a low earnings per share rankings that are
making new lows. So, if we start to get worried about the market
environment, we’ve got a list of stocks with negative criteria making
new lows. It’s useful to constantly have a list of stocks like these to
hedge our portfolio on the downside, or go net short.

Many times you can compare the New Highs and New Lows lists and
find stocks in similar industries and identify short-term trading
opportunities on the long side in one stock and on the short side in
the other stock–the kind of paired hedge opportunity I talked about
before.

You’ve based you trading on your own unique research and

testing. How do you feel about most standard technical
indicators?

I think the majority of technical indicators that many investors look

at are not valid. Most investors are so focused on finding some holy
grail trading indicator that they ignore basic approaches that work,
as well as basic money management.

With most indicators you read about in books and magazines, some
guy explains how to use them and shows a few examples–and
usually in the examples you can find instances for which the
indicator didn’t work. When you actually make these things
mechanical and test them, you find that most of them don’t even
make money. Unfortunately, investors are spending most of their
time looking at things that don’t work.

The most important things are really pretty simple. Risk control and
market selection–those are the things traders should be paying
attention to.
Mark Boucher’s Top Relative Strength and Earnings New Highs list
and Bottom Relative Strength and Earnings New Lows list are
available in Hedge Fund Managers Corner.

$CRWD from the penthouse to the doghouse as Stan would say. Looks like some institutions are
getting out.

Asym 0731
In his book The 5 Secrets to Highly Profitable Swing Trading Ivanhoff discusses industry
momentum and it's impact on stock movement. Here's what he has to say:
"Price setups define the risk-to-reward and the probability of a breakout (breakdown) happening,
but they don’t tell you the probability of following through after a breakout and the likely size of
the move. It does not matter how perfect is the technical setup that you or your software have
recognized. If you are not in the right industry, you are poised to achieve inferior results as a
swing trader.
Industry momentum defines the likely magnitude of the move after a breakout (breakdown) and
the probability of a breakout following through. Having an eye for industry momentum is among
the most valuable skill a swing trader could learn."
Let's break this down:
Risk-to-Reward and Probability of Breakouts:
 Setup Identification: Ivanhoff emphasizes that price setups help define the risk-to-
reward ratio and the probability of a breakout or breakdown. These setups are crucial for
determining potential entry points based on technical analysis.
 Limitations of Technical Setups: However, he points out that these setups alone do not
guarantee follow-through or indicate the likely magnitude of the move post-breakout.
This means that even a technically perfect setup might not yield significant gains if other
factors are not favorable.
Importance of Industry Momentum:
 Magnitude and Follow-Through: Industry momentum plays a vital role in determining
the extent of the move after a breakout and the likelihood of sustained follow-through.
Stocks within strong industries are more likely to exhibit significant moves and sustained
trends.
 Sector Analysis: Focusing on industry trends allows traders to align their trades with
broader market forces, increasing the chances of success. This highlights the importance
of macro-level analysis in conjunction with micro-level technical setups.
Implications for Swing Traders
1. Combining Technical and Group Analysis:
 Holistic Approach: To improve trading outcomes, traders should combine technical
analysis with industry and sector analysis. This holistic approach ensures that trades are
not only technically sound but also supported by broader market trends.
 Example: A stock showing a perfect technical setup but within a declining or lagging
industry might underperform compared to a stock in a booming sector. Therefore,
 integrating sector strength into the decision-making process can enhance the probability
of success.
2. Enhancing Trade Selection:
 Focus on Leading Groups and Sectors: By identifying and focusing on leading groups,
traders can select stocks that are more likely to experience strong follow-through after
breakouts. This increases the potential for capturing significant price movements.
 Screening for Momentum: Implementing industry and sector screens as part of the stock
selection process can help identify where institutional money is flowing, providing a
better foundation for potential trades.
3. Risk Management and Position Sizing:
 Informed Decisions: Understanding industry momentum helps in making more informed
decisions about position sizing and risk management. Traders can allocate more capital
to trades within strong industries and scale back on positions in weaker sectors.
 Adjusting Expectations: Recognizing the impact of industry momentum on trade
outcomes allows traders to set realistic expectations for trade performance and manage
risk accordingly.
Conclusion
Ivanhoff's insights underscore the importance of not relying solely on technical setups but also
incorporating industry momentum into trading strategies. While price setups define the initial
risk-to-reward and breakout probabilities, industry momentum determines the sustainability and
magnitude of those moves. By developing the skill to recognize industry trends, swing traders can
enhance their trade selection, improve their risk management, and ultimately achieve better
trading outcomes.
By focusing on both micro-level technical setups and macro-level industry trends, traders can
create a more comprehensive and effective approach to market analysis. This dual focus enables
traders to navigate the complexities of the market with greater confidence and precision.

Key Points of the Quote The primary message is to align your trading strategy with the market
trend. If the market and stocks are rising, the strategy should be to take long positions. The use of
moving averages (specifically the 10 and 20-day moving averages) as indicators for trend
direction is emphasized. When prices are above these averages, it suggests a bullish trend; when
they fall below, it suggests a bearish trend. Moving to cash when stocks fall below the moving
averages is a form of risk management. It prevents holding onto losing positions and minimizes
potential losses. Qullamaggie advocates for a straightforward, rules-based approach to trading.
By relying on clear, quantifiable signals (like moving averages), traders can avoid the confusion
and emotional biases that often accompany more complex strategies. Emphasizing control over
trading decisions and ignoring market noise highlights the importance of focusing on what can be
managed directly—your trading strategy and risk management practices. Implications for Traders
Using moving averages to identify trends can help traders make more informed decisions about
when to enter and exit positions. The 10 and 20-day moving averages are commonly used due to
their ability to capture short to medium-term trends. Following a rules-based system encourages
discipline. Sticking to predefined rules can help traders avoid emotional decision-making and stay
aligned with market trends. By moving to cash when stocks fall below critical moving averages,
traders can avoid significant drawdowns. This approach ensures that traders are not exposed to
prolonged market declines. Being in cash during bearish phases also preserves capital, allowing
traders to re-enter the market with a stronger position when conditions improve. Markets are
filled with noise—short-term fluctuations and irrelevant information that can distract and
confuse traders. By focusing on clear signals and what can be controlled, traders can maintain a
clear and focused approach. Conclusion Qullamaggie's comments underscores the importance of
trend following, simplicity in trading strategies, and effective risk management. By aligning
trading actions with market trends, using moving averages as a guide, and focusing on what can
be controlled, traders can enhance their decision-making process and improve their chances of
success. This approach minimizes the impact of market noise and helps traders maintain a clear,
disciplined, and objective perspective.
20240802
As I suspected, it looks like yesterday was a "sucker rally." Lots of stops getting hit and pivot
failures today. Our stock only STEM model sell signal on 7/17/24 was timely. Proceed with
caution. Corrections are normal within a bull market. If we close down near current levels
(especially if volume is elevated), lower lows are likely in the near term. Longer-term, this is
correction within a bull market and we look at corrections as buying opportunities, but not just
yet; not until we see a proliferation of stock setups that meet our criteria. http://minervini.com

In this kind of market it is easy to start questioning oneself and ones ability to make profitable
trades (sometimes leading to styledrift/boredom/forced trades).... In situations like this I do two
things: 1) Reminding myself of the POTENTIAL of my trading style. I do this by looking at recent
good periods for me like: july 2022, jan 2023, june-july 2023, nov-dec 2023, feb 2024. I look at
how the market was trending nicely up with MA10 MA20, and screenshots of trades I did during
those periods. 2) Reminding myself to TRUST that good markets will come along again in the
future. I do this by looking at chart exemples from times before I even was born, this way Im
reminded that my style of trading is timeless and good periods ALWAYS come along again in the
future for those who preserve their capital.

It's not hard to make money when markets are going up. The hard part is keeping it.

This is where if you haven't got a risk management plan you better get one. This pullback in
$IWM is nasty and no signs of a bounce. Thankfully I wasn't too long however as the saying goes
'when they raid the brothel even the piano player gets arrested'.

Study the last 15 corrections and identify common characteristics of a bottoming process. Then,
go back and study 30-50 corrections and do the same. You'll be much more patient than if you
are trying to anticipate right now and in too early.

Reversal patterns are far less reliable than are continuation patterns. But occasionally they work.
$DAX

These are some of my favorite @Qullamaggie quotes.... Enjoy!

 "This is the hard part: identifying a good setup, like a REALLY GOOD setup vs something that
is random and mediocre. Because that is also gonna reflect on your results. If you trade
random setups your results is gonna be random too. You want to find really find the outlier
stocks."
 " If you dont have any draw downs means you are not taking any risk which means you are
not making any money."
 "No one is going to roll out the red carpet for you. Like NOW is safe to make money. That is
NOT how it works. There is ALWAYS something to worry about. But the key to successful
trading is to IGNORE all those things. Ignore ALL the noise."
 "The hardest thing to do; sit and do nothing. That is why you need to get a hobby. Get into
sports, gaming, get a kid, get dog. That is your edge in a market like this. Doing things
outside of the markets when the conditions are not favorable; that is and edge"
 "The market is going to give you clues. It is all about listening, listen to what the stock is
trying to tell you. We are NOT in the trading business guys, we are in the listening business.”
 "Our main job is not to trade. Our main job is to wait."
 "If you are a swing trader there is nothing here to do, you may as well take the day off. Go
study. Do something productive. The most important thing is to preserve mental capital.
Stay positive. Stay healthy. Let most market participants wear themselves out; then when it
is time you can come back and be aggressive. You are going be in a position of strength. That
is how you win the game of trading; you have to do some things differently."
 “I really dont see the value in other peoples opinions. I would rather listen to the market.
 The faster you learn how to really listen to the market, the sooner your suffering will end.”
 "Just trade well and the money will magically appear. Just trade well". "I want a setup where
I feel I almost cant lose"
 "You cant sell simple things. People want complexity. Because people many times don't
belive that simple is the best answer"
 " If you are a new trader you should be selling at least a part of your position pretty quickly.
Just lock in that profit. Build your confidence up. Get your equity curve to start moving in
the right direction. Aggressively locking in profits and selling losers even more aggressively"
 "I don't like random looking stocks. Because I know if I trade a random looking stock I'm
going to have some random looking results. I want superstar results. That is why I only want
superstar stocks and superstar setups."
 "It is very hard to tune out all the opinions and news. But once you are in the markets for a
few years you realise it is all bull shit. No one knows anything."

Started my weekend scan and not finding many setups. Market is speaking are you listening?
下午 6:10 · 2024 年 7 月 20 日
Market will always give clues.
上午 12:13 · 2024 年 8 月 3 日

JTrader @ jtraderco
Becoming a better trader #thread It took me 25 years to improve this process but this is what my
6 & 7 figure traders that I mentored have been doing to become successful. I am going to share
all this:
My Goal: improve my trading skills and focus the next week only on the best trading
opportunities.
Let's take small caps for example ( I will do a different one for mid&large caps)
1. Analysis 3 categories
First I analyze all the "hot stocks of the week" and divide them in 3 main categories
- gaps above 30% with at least 1M volume traded
- non gaps stocks that extended after the open 30% +
- overextended plays (runners for more then 1 day)
An example below of a scanner with edgetotrade

2. Runners or Faders
Of all these 3 categories I need to track the setup
- did we have a long setup?
- did we have a short setup?
In order to do this you simply need to put a chart 5 minutes and put vwap and #JLines (72,89
ema) and see when the price ran above or faded below
My goal is to understand if the market is giving more short or long opportunities and work in that
direction. Example of a pattern study https://youtu.be/WhNjObIV7Ww?si=CzFXMCuHluIEY0jt
3. Questions I ask myself these questions
- how I could have traded it?
- how was the price action?
- how was the volume?
- did we have float rotation?
- any major takeaways?
I work with the assumption that by studying the history of a chart and the actual scenario in the
market (for example more runners vs faders, more IPO, more pump and dumps, etc) I will have an
edge for the coming week.

4. Setups
Then I need to find which setup these stocks (the 3 categories) gave
We are going to analyze 2 setups of my playbook Gap & Crap
These stocks are the easiest to trade often with:
- dilution
- low cash
- bagholders
- fluff news
- big sellers
I look to trade a pop in the first 15-30 minutes and hold. Risk above Jlines or vwap, tp key daily
level or previous day low.

5. Pattern Extension / JLines curl

These stocks are often with certain parameters:
- ssr
- nanofloat
- multiple float rotation
- high volume
I look to trade a dip in the first 15-30 minutes and hold. Risk below Jlines, tp 3R+

6. Tracking
At this point I use an excel sheet and I track all the setups we had for the 3 categories and I will
do this each week.
I will have then a precise clue about what the market is doing, which setup is the most profitable,
which setup I need to avoid.
You have to be systematic if you want to be professional and you need a way to work.
Data is the only real edge a trader can have (retailer).

7. Report Card
Maintain a Report Card and Trading Report: Similar to the one shared at T4Cause2022( pic below)
You can read the entire thread here
8. Preparing % risk
After I have the results of my performance, I will then decide which % of my account allocate on
each trade and which % of risk use.
I use a spreadsheet that a coder made for me, so each day I will simply insert where my account
stands, put the amoung of risk I want to have and he will calculate the amount of $/shares I need
to trade. You always win the war in advance. So plan it ahead. Read this
https://x.com/jtraderco/status/1808164226063597803
9. Time to work on yourself
- meditation
- affirmation
- emotional control
In this thread you will see my routine I need to always keep my emotions under control and keep
my mind in a good state if I want to perform properly as I tend to be anxious

Final notes:
You want to learn more?
The goal is that you finish August a better trader than you started.
Sign up and join me for free so I can help prepare you for the market daily and improve your
stock selection. Get your invite FREE here :

Trading is a War Calculated in Advance I prepare my plan each day focusing on this
The bottom up approach with selecting good looking setups and acting on breakouts can guide
you on the developing theme. Be it defensive sectors or yield sensitive part of the economy. Not
all stocks go up and down at the same time.

For me the 200-day average is the trend filter. Any price action below the 200-day average, I start
thinking with the bearish perspective and only focus on bearish chart patterns. Benchmarks that
breakdown 200-day average with this week's correction should be treated with caution.
0804
Beware of "perfect" looking bullish setups in the recent market environment. That was exactly
what we saw in $IWM coming into this week. A "text book perfect" bull flag, which under normal
circumstances would lead to more upside follow-thru breakout. This week, however, I was
looking for this $IWM breakout to not only fail but fail badly because 'from failed moves, comes
fast moves in the other direction'.

Something I learned from

@brianzinman
was the Friday Rule. It’s simply a rule he developed after looking at 30 years of his trading
records. Near the close of every Friday, you sell any red positions. Positions that show a loss. For
me, I took this rule and now apply it everyday. I call it the Everyday is a Friday Rule. You will be
surprised at how much your returns will improve. As Jesse Livermore said, “Big movements take
time to develop, but good trades move into profit quickly.” Market feedback is important relative
to where you buy! Scrap the open risk and reset the portfolio to operate at each morning from a
position of STRENGTH!

MM 0802
The market is under pressure and the picture is getting more ominous. The VIX has now officially
doubled off the lows. As of yesterday we were net short. With our STEM model RED (its most
cautious reading) since 7/17 and few stocks meeting our criteria in buyable position... cash is
king!

DAYTRADING TIPS Rules to avoid headaches

- don't trade when feeling sick
- don't trade when no setup
- don't trade after 2 losses
- don't trade when late at desk
- don't trade when upset
- don't trade to revenge
- don't trade to impress
- don't trade with anxiety

If you end up getting stopped out or were forced to sell, do not start thinking "I sold so let the
market crash" I might be able to buy lower. This attitude will only make you more isolated in the
perma bears camp and could result in missing great rebound or even breakout opportunities.
Stay emotionally neutral. Getting stopped out is part of doing business and is a good business
practice.

Important to always deal with Possibilities Not Probabilities and never Certainties $BTC
MM
Markets started the week on a very sour note with the VIX spiking above 60 yesterday on the
open. This was the largest volatility surge since the Covid crises.
The market is now very oversold and will likely bounce, but make no mistake... this is a very
dangerous unsettled environment.
There's an old cliché known as Turnaround Tuesday — when markets rebound from a selloff at
the start of the week. But such recoveries don’t guarantee a bottom. Volatility is likely to remain
elevated, and short term counter trend rallies are where institutions will trim risk into.
With the exception of a couple shorts, going into yesterday we were all cash; no longs.
The most durable sign that a reliable bottom has been formed is stock setups working from
breakout levels. Currently, there are no buyable setups to speak of.
From here, we simply wait out the storm and remain on the sidelines as the scavengers fight for
hard-earned pennies and we wait for easy dollars. http://minervini.com

You only need one good trade a year to destroy the performance of the S&P 500. But you can
ruin a year trading in harsh environments. If you waited all year until Monday's panic you'd be
chastised for "missing out", but there's ETFs like $SOXL up 30% from the lows beating $SPY.

There is a big difference between tracking relative strength and constantly chasing it in a poor
environment

Trading is not an intellect pursuit it’s a performance activity. Over intellectualising trading will
lead you to overfocus on analysis, seeking formulas, and solving for solutions, at the expense of
developing your risk abilities, risk skills and risk process.

One VERY GOOD point

@TomHougaard
is making in his book Best loser wins is that: Trading is 90% Mental Preparation. I could not agree
more! Most traders spend 90% of their time on charts and 10% on mental preparation....
(something like that) Why do +90% of all traders lose money over time? Because they are not
mentally prepared.... Many traders have systems with (in theory) an edge, but the lack of mental
preparation makes it hard to execute.... Better would be to spend 90% of the time on mental
preparedness and 10% on charts.... Without mental preparation trading will be a constant
oscillation between extreme high hubris to deep frozen fear... The markets job is to separate
most traders from their money.... one way or the other....sooner or later... There is no book on
trading I have read more times than Trading in the zone by Mark Douglas. In this book there is
not a single chart. All about the mental game. If I was a new trader starting out I would read
books like @markminervini and William Oneal, watch @Qullamaggie/ @TraderLion_/
@PradeepBonde on youtube to get an edge trading stocks. Then I would shift all my focus to the
mental game. I would read/listen to books like Trading in the zone, Bulletproof trader, Best loser
wins, Mastering the Mental Game of Trading over and over and over again. One of these books
every week until my trading became profitable... I wish someone would have told me this 15
years ago... I wasted a lot of time.... and unnecessarily blew out many accounts....

As the bottom forms, the down days are always more telling than up days and gap ups. Stocks will
start to decouple from the indexes' action on down days in the markets — that is the first sign
that we are nearing a trend reversal.

Why are people scared to trade a bounce? Is it because they got wrecked in the selloff?

It really is possible to observe price action without pressing buttons. Discipline.

Yesterday the market bounced, but the rally attempt was not impressive. The popular averages
closed in the middle of the day's range on lower volume. The Russell 2000 was the strongest
closing up +1.23%. The "rally" looked more like a dead cat bounce than a strong start to a new
sustainable up leg.
Given the size and speed of the decline over the last few days, there is undoubtedly some
trapped supply out there. At the very least, we are likely to experience more volatility, something
I avoid like the plague. Until the market stabilizes and setups start to emerge, I'm pretty much
sidelined. For how long? As long as it takes; could be days, could be weeks.
It has been 12 months since the Fed last raised rates, longer than the median eight months. The
Fed is now preparing the markets for a September rate cut, indicated by changes in their
statement acknowledging that job growth had “moderated” and the unemployment rate had
“moved up.”
Fed Chair Powell mentioned a September rate cut is “on the table” if recent data trends continue,
but he dismissed speculation of a 50-basis point cut. The July employment report was
surprisingly soft, paving the way for a potentially more aggressive Fed. The recent perception
shift from inflation to recession is something I warned about, and it's classic.
http://minervini.com

Many new and experienced traders have a very difficult time being in cash, particularly during
volatile times when indices make outsized daily moves. It’s a mindset issue. If you’re not a day
trader that volatility is exactly when you want to move more slowly or not at all. But many are
seduced by action, and also “sold” action on social media. As you gain clarity around your style
and as a trader in general being in cash can be rewarding and even pleasant. You refresh and
reset, retain confidence, reinforce your decision-making clarity by following your plan and
aligning with your strategy.
After all, your biggest “edge” as a retail trader is picking your spots.

Large position sizing, at the right time, in the right stock while managing risk tightly, is one of the
key skills that separate the top performing traders from the rest
This is one of the best overviews of @DanZanger 's strategy I've ever read. If you study Zanger's
past letters or his interviews, you'll see his HEAVY emphasis on high earnings/sales growth and
ONLY trading the leading names.
In one of Zanger's old newsletters, someone asked him, "Dan, why do you show so many of the
same stocks over and over again?"
Zanger replies, "The reason is that I focus on the leaders of each market move. That is the stocks
that are making the biggest move in the stock market. Stocks that are most likely to double or
triple in price. Why would I want to own anything else and why would you want to own anything
else?"
Zanger would repeatedly show around only 10-15 leading names in any given year or market
cycle. And his explanation for that was...
"I don't see my job as listing all stocks that are breaking out, because I don't want to own under
performing stocks. I see my job as selecting the biggest movers in the market and concentrating
my positions on just those 4 to 6 best movers. This is why I list only those stocks that I see as
having the best chance of making the biggest moves in the market."
It's not about the quantity of your stock universe, but the quality. If stocks made big moves left
and right, then it would be much easier to outperform the market. But most breakouts aren't
worth buying and will just trick you if you aren't picking the right stocks.
Zanger - "Remember folks, just because it has a base and it breaks out doesn't
mean it's worth owning."
Qullamaggie - "A breakout is not an edge, you need to buy breakouts in the right
stocks, just a breakout is not an edge."
And if you study both Zanger and Qullamaggie's work, they both focus on the same names to
buy.
Names that have either large earnings/sales growth, a hot story, and/or in a hot theme/sector,
showing relative strength and momentum compared to the market.
https://tradingresourcehub.substack.com/p/dan-zanger-finding-the-biggest-movers?open=false#
%C2%A7fundamentals-powerful-earnings-and-a-big-global-product Credit to
@KayKlingson
for writing this article.

Steal this cheat sheet for buying quality stocks:

EPS % Change Last Quarter > 25%
EPS Growth This Year > 25%
Sales Growth Last Quarter > 20%
ROE > 15%
Average Daily Volume > 1 mil
Then watch the charts for a good entry point. Smooth sailing all but guaranteed.

“Success in the markets isn’t about being in the game all the time; it’s about being in the right
game at the right time. Patience and discipline are the true keys to lasting wealth.”

Peter Brandt
Perspective on charting I do NOT trade opinions. I trade set-ups via classical charting principles. I
avoid trades when price is range bound. My entry is on completed patterns. $BTC displays what is
known as an inverted or expanding triangle. No breakout yet so no trade.

MM
When you truly make a commitment to a strategy, you free yourself from the chains and noise of
the indexes, opinions and temptations driven by hindsight. You could care less if the Dow rallies
30%, or if Paul Tudor Jones is buying while you are in 100% cash. You understand the value of
uncorrelated returns, uncorrelated volatility, and most of all... uncorrelated thinking. It's your
uncorrelated approach that drives your alpha and your independence, and it confounds the
conventional thinkers.

Ted Zhang
NASDAQ Composite above a rising 10/20 is what I am looking for to tell me to engage in longs.
We aren't even close yet.

Asym
My goal in swing trading isn't to make a steady return. The market doesn't work like that. As Dave
Landry rightfully pointed out, swing trading is streaky, meaning a majority of profits will often
come over short periods of time.
This means there will be a positive skew during some periods and a negative skew during others.
All trading approaches go through periods of outperformance and underperformance - your job
is to know your method intimately enough to know which period you're currently in.
As Oliver Kell said in Victory in Stock Trading: "It is very unlikely to put up the same return each
month. You may have 5% months, losing months, or 60% months. The goal is to avoid major
setbacks and let compounding work for you through the year so you can finish strong."
If the market rallies, on average, for several weeks several times a year, your job is to be heavily
long during those good swings and do little to nothing during the tougher periods.
Let's say the market rallies for 6-8 weeks and then goes into a sloppy choppy period for 6-8
weeks. Your goal should be to make 20, 30, 50% during that good period. When the trend
transitions, you'll often not know about it until after you've experienced some turbulence. Your
expectancy will probably have turned negative over the last 5-10 trades and the weight of
evidence of your market monitoring approach will likely have done the same.
Traders shoot themselves in the foot by not knowing how to back off. If you make 50% during a
good period and then draw down 20-30% during a trend transition, then you've made almost no
progress at all. To make matters worse, traders will continue to fight the trend and grind their
accounts. How do I know this? Because my dumb ass did it over and over and over again for years
and years.
Be a pig when it's time to be a pig and be a chicken when it's time to be a chicken - and most
importantly, know the difference.

"Market monitors, I don't really look at much, I do look at the indices, I stopped looking at the
breadth and sentiment indicators a long time ago. They were all overbought and overheated
most of last year, and I made 900%, I would have made 0% if I had paid attention to those, so
those have dropped for good. Just focus on the stocks, you don't even really ever have to look at
an index ever, I just do it because I'm brain damaged, I've been brainwashed since day one that
these things matter. All you need to do is focus on the narrow set of stocks you get from the
scans. The superstar stocks, all you need to do, pay attention, that's the problem people are
paying attention to all these useless things, and they're not paying attention to what really
matters, this is why there are so few superstar traders, this is why there are so many traders that
fail. My job is to make you focus, and put in the effort, and those that cannot focus and cannot
put in the effort, go away. That's the thing, I only want hard workers, dedicated people, only
dedication can make you a successful trader." –
@Qullamaggie

I used to think that more trades meant more chances to win. But that led to overtrading and
unnecessary losses. Now I discipline myself to trade only when my criteria are met, which has led
to more profitable trades and less stress!

TA@TaPlot
My most recent 13 closed trades (winners are mostly partials). What do you notice? Yes, risk
management IS the Holy Grail.
%profit
-0.04% -0.14% -0.80% -1.99% -1.15% -1.10% -0.82%
7.71% 7.69% 12.11% 3.00% 1.37% 18.71%

Some moved up to derisk and take on new risk

I don't use trailing but I move stops manually as the stocks move. Especially when I am trading
one foot out the door.

Yes and breakout from pivots inside the base

MM in 2024 traderlion
过了几个月再 review 自己的交割单，对当时的场景还有印象，事后还能很客观。是不是有卖得太早的问题。就像在镜子里面看自己。

VANGUARD REIT ETF VNQ

INVESCO EXCHANGE TRADED FD TR RSP
ISHARES RUSSELL TOP 200 GRWTH IWY
VANECK ETF TR VANECK MORNINGST MOAT
ISHARES TR ISHARES PFD AND INC PFF

Tom Dante@Trader_Dante
Finding and taking excellent trades is not the hard part.
The hard part is trying not to do anything stupid in between them.
Elite Swing Traders@1ChartMaster
When I stopped trying to always hit the home run and started going for those singles and doubles
my trading changed forever.

One of the hardest things to do is wait for the right setup to come along. The need for constant
action will lead to taking mediocre setups.

Sometimes the best trade is no trade at all

Two of the most impactful decisions in trading are working in an environment conducive to your
style and sizing up when appropriate. These two things will determine your returns far more than
any of the dozens of low impact decisions so many are distracted by each day - like SMA or EMA,
which scan parameters, which script on your charts etc etc. Focus on what makes a difference.

In a healthy market, it can be hard to narrow down your focus list into 3-5 actionable names
(especially if they’re all set up technically). Here’s a quick checklist to filter down:
→ Within 15% of 52-week or all time highs
→ Trades > 500,000 shares per day (liquid)
→ Sales & EPS growth > 10-15% compared to prior quarter
→ Increasing fund ownership quarter over quarter
→ Recent earnings surprises > 5%
Again, the criteria above is extremely valuable in narrowing to the best of the best when your
focus list can have 10+ names on it.

Chhirag Kedia
@swing_ka_sultan
A few days ago, the market was choppy, with few breakouts holding up. Now, everything
seems to be working, and the portfolio is skyrocketing.
Same setups, same trader, same mindset—different results. So, what changed?
If setups and patterns were the key to making money, they should've worked a few days ago
too?
Some argue it’s about value, others swear by patterns. But honestly, it seems like randomness
to me. People say the Indian market is 7-8 years ahead in valuations and will stagnate until it
balances out. Yet, the market keeps soaring, transforming the lives of those who go with the
flow instead of questioning it.
In reality, it’s the liquidity flow that drives the market, not always value or technicals. Just go
with the flow - the market will tell you when it’s time to change course.
2024 年 8 月 22 日

20240829
$SMCI I have a feeling a lot of people that are only passively interested in the markets are now
stuck in this because they bought it as it was breaking down thinking it was a deal not knowing
where we are in the market cycle or what stage we are in stage analysis of this name.

Asym 0820
Trading for the Meat in the Middle: Why You Don’t Have to Pick the Lows to
Outperform the Market
@AsymTrading
In the world of swing trading, there's often a misconception that the best traders are the ones
who can consistently pick the bottoms or tops of the market. Many traders get caught in the
chase for the "perfect" entry point, believing that nailing the lowest possible price as the indices
move off the lows will maximize their gains. However, this approach is not only unnecessary but
can also lead to significant losses and frustration. The reality is, you don’t need to catch the lows
or even the highs—just capturing the meat in the middle of a trend a few times a year can lead to
performance that far exceeds the major indices.
The Myth of Picking the Bottom
One of the biggest traps traders fall into is trying to buy at the absolute low of a move. It’s a
tempting idea: buy at the lowest price, ride the trend to the top, and sell for maximum profit. But
markets are rarely that predictable. Attempting to pick the bottom often leads to what is called
"catching a falling knife," where traders buy too early, thinking they’ve found the low, only to see
the price continue falling.
This approach can result in repeated small losses as traders stop out of positions prematurely or
worse, it can lead to significant drawdowns if traders hold onto losing positions in the hope that
the market will eventually turn around. This is often the root cause of FOMO (fear of missing out)
that leads to further mistakes, as these traders are constantly in a state of trying to fill in the hole,
as the hole keeps getting bigger.
Avoiding FOMO and the Trap of Big Drawdowns
One of the biggest contributors to FOMO is the psychological impact of previous losses. Traders
who have been burned by downtrends or who have taken large drawdowns often feel an intense
pressure to make up for those losses. This desperation can cloud judgment, leading them to
chase moves they aren’t prepared for, and overextend themselves in an attempt to regain lost
ground quickly.
Ironically, this urgency to recover losses can result in even more losses. These traders might jump
into trades too early, fight the prevailing trend, and take on excessive risk without waiting for
proper setups. This often leads to a vicious cycle of losses and desperation, causing their trading
account to spiral downwards.
The key to avoiding this cycle is to focus on capital preservation and patience. Just because the
market is moving doesn’t mean you have to jump in. Waiting for the right conditions, when the
trend is clear and confirmed, is far more effective than trying to make up for past losses in a
hurry. You don’t need to recover all at once—small, steady gains from capturing the meat of
several trends will add up over time.
Catching the Meat in the Middle
The more sustainable and effective approach to swing trading is to focus on catching the middle
of the trend—the “meat” of the move. The middle portion of a trend is where momentum is
established, and the risk of major reversals is lower compared to trying to time the exact bottom.
By waiting for confirmation that a trend is underway, traders can enter with more confidence and
allow their trades to work within the established direction of the market.
This method doesn’t require perfection. You don’t have to be the first one in at the bottom or the
last one out at the top. Instead, you can enter after the market has shown strength and
established a clear upward trajectory, and exit when the trend begins to lose steam. Capturing
these middle sections of several strong trends throughout the year can lead to significant
outperformance, as long as you know how to step aside during the poor periods.
Outperforming the Indices
Swing traders have a distinct advantage over passive investors when they focus on capturing the
most actionable part of trends. While major indices like the S&P 500 may experience long periods
of sideways or choppy action, swing traders can sit out of the market during these times and only
engage when the opportunity is favorable. This selective participation allows traders to minimize
drawdowns during market corrections and capitalize on the strongest trending periods.
By catching the middle of the trend multiple times throughout the year, swing traders can often
achieve returns that far outpace the indices, without needing to constantly be in the market or
worry about the exact highs and lows. This approach requires patience, discipline, and the ability
to manage emotions.
Conclusion
The key to successful swing trading isn’t about perfect timing at the bottoms or tops. It’s about
patience and discipline—waiting for the trend to establish itself, entering during the momentum
phase, and exiting when that momentum begins to fade. By focusing on capturing the meat in
the middle of the trend, traders can significantly outperform the major indices while avoiding the
pitfalls of FOMO and big drawdowns.
Rather than fighting downtrends and rushing to make up for losses, embrace the approach of
waiting for favorable conditions and taking advantage of the most reliable portions of market
trends. With this mindset, you’ll not only preserve your capital but also set yourself up for
consistent success.

Price can be:

1. Theme-Driven.
2. Story-Driven.
3. Sales-Driven.
4. Earnings-Driven.
5. Market-Driven.
It's when many of the 1-5s above align do you get a Super Performer in the markets.

2024 年 9 月 2 日
Never disregard a bearish engulfing candle. Often times it's a warning shot over the bow.

Trading in the Zone taught me one of the most valuable lessons about trading. Every time I enter
a trade, I write down: "If I lose this trade I'm gay" This gives me the motivation to make it a
winner, instead of a loser. Sometimes you just need a small shift in mindset.

TraderLion
@TraderLion_

To perform as a trader, you have to take advantage of a strong market. Everyone knows this.
What's less clear is realizing when market conditions aren’t at their best, but not at their worst,

and then aligning your timeframe accordingly. What do we mean? ↓

......
To summarize:

· Below 50D: day trading / 1-2 day swings

· Above 50D: swing trading (5-8 day holds)

· Above 21D & 50D: swing to position trading
You have to let market action dictate your hold time if you're ever going to perform as a trader.

Negative expectation breaker as we gap and go lower breaking below the recent range and the
21ema

MM
Quote of the Day: If you want to know everything about the market, go to the beach. Push & pull
your hands through the waves. Some are bigger, some are smaller. But if you try to push the wave
out when it’s coming in, it’ll never happen. The market is always right. — Ed Seykota
Reply:
That’s a powerful quote by Ed Seykota. It captures the essence of understanding and adapting to
market forces rather than trying to fight them. The analogy of waves and the market highlights
the importance of going with the flow and recognizing the natural rhythm of market trends.

There’s many tools in trading that cost a fortune and have relatively little benefit. Journals by
contrast cost barely anything, yet can be used in all sorts of beneficial ways to help power your
trading. This was of my old journals from my trading days
6 Ways to Level Up
· No big losses (cut losses quickly)
· Never average down
· Never *buy* stocks in downtrends (short them)
· Avoid extended stocks (10% above 8ema)
· Never let a good gain become a loss (no round trips)
· Nail down profits (when profit is above average winners)

Asym
Dan Zanger in Momentum Master: “Observe and live in the firestorm of the market for a few
dozen years, and you’ll learn not to stick your hand in the fire when you see it. I got burned too
many times to forget what “chop and slop” truly means, whether long or short. Market
behavior follows distinct repetitive patterns that teach clear lessons, so when you see a market
starting to act badly, you’ve learned instinctively that it’s time to back off for the required
weeks or months. During that time you don’t go on vacation and turn your back on the market;
you still need to be watching the market every day so you’ll know when it has calmed down
and is back to normal. Diligence even during a choppy market is part of good timing.”
Key Takeaways: Avoiding Participation in Uncertain Markets: Zanger underscores the importance
of recognizing and sidestepping tumultuous market periods, suggesting that both bullish and
bearish positions can result in losses when the market lacks a clear direction.
Understanding Market Corrections: He alludes to the dual nature of market corrections – they
happen both in terms of price fluctuations and time duration. It’s essential to comprehend that
such corrections, especially their temporal aspect, can often be longer than most anticipate. This
can be particularly challenging for traders eager for continuous engagement.
Continuous Learning and Preparation: Even if one refrains from active trading, Zanger advises
continuous market observation. Such periods offer opportunities to refine one’s strategy, observe
resilient stocks and sectors, and analyze historical market data. This proactive approach equips
traders for success when favorable conditions return.
The Cyclical Nature of the Market: Timing is everything in trading. Good timing doesn’t just mean
knowing when to enter or exit a trade but also knowing when to sit on the sidelines and observe.
This demands continuous attention to the ebbs and flows of the market cycles. As Ivanhoff said,
there are times when everyone is a winner and times when everyone is a loser. Recognizing the
difference and adjusting accordingly is the key.
下午 12:25 · 2023 年 8 月 11 日
·
I reposted this Zanger thread for good reason. I squarely believe one of the main reasons many
traders fail in the long run is they don't know when to do nothing. They want to trade all the time
and as a result, they boom and bust. Drawdowns are easy to incur and difficult to claw out of, just
based on the fact that the math is geometrically against you. A 20% drawdown requires 25% to
get back to even. 33% drawdown, 50%. 50% drawdown, 100%. The math isn't in your favor.
All strategies go through seasons of feast and famine. All seasoned swing traders know this and
learn to do little or nothing when the odds aren't in their favor and to step on the gas when the
odds are.
Zanger's quote perfectly encapsulates the need for discipline, patience, and market awareness.
His experience of observing the market for decades underscores how essential it is to learn from
the patterns that repeat over time. As Zanger says, it's not just about avoiding the chop and slop
of the market but about being diligent during those difficult times—observing and staying ready
to act when conditions improve.
Many traders get burned because they either try to force trades in unfavorable conditions or stop
paying attention when the market gets choppy. The key takeaway here is that seasoned traders
learn to step back during volatile or unpredictable times, but they never fully disengage. Instead,
they keep observing, staying in tune with the market's rhythms, so they can act quickly when the
conditions become favorable again. This discipline of watching, waiting, and knowing when to
strike is a hallmark of long-term trading success.
上午 4:37 · 2024 年 9 月 5 日

Why haven’t you found “the secret” after all those books and videos and webinars? Because
there isn’t one. Discipline - Risk Management - Situational Awareness - Process - Experience /
Instinct The real goal is longevity.

Being able to distinguish between risk on and risk off periods will improve your trading
dramatically. Money can be very easy to make sometimes and even harder to keep others. The
real power is being able to sit out and wait for a better environment.

Don't try and be a hero...if the trade isn't there it isn't there. Don't make one up. Save the
money for better times. Our job is to manage risk.
The longer you trade, the more you will realize that emotions have a major impact on your
success.

" When I wake in the morning, I don't want to trade. The market has to sell it to me ". Solution for
over-trading. What a perfect and self-protecting philosophy.
@Trader_Dante

Richard Moglen

20240907
@RichardMoglen
One of the most important trading skills to work on is knowing when to do less
This environment filter helps you avoid failed setups, grinded stop hits, chop, and frustration
Simple rule to start with is (when trading long ) is to do less when the $qqq is under the 21ema.

Anything is possible. I don’t want to get too bearish but the individual stock picture is quite
negative. More and more the leaders of the last cycle are breaking down below their 200-day
moving averages one after another.

We are increasingly seeing names in late stage 3 breaking down into stage 4. If this continues, I
will increase my negative view on the indexes as well.

Tom Basso
@basso_tom
I now have all 6 stock index futures that I trade around the world net short. Be careful out there
and enjoy the ride!
上午 2:15 · 2024 年 9 月 7 日
Ted Zhang
When a market wizard is completely net short, caution is always advised lol

Trading is not about being right or wrong but finding low-risk entry points that **could** give
asymmetrical returns. I am currently wrong on #Bitcoin and it appears that the halving cycle we
are used to is dead. We are now in uncharted territory and breaking down from a multi-month
base. Manage risk accordingly if you still own it.

The definition of a downtrend - lower highs, lower lows, big volume down days, lower volume up
days, upside gaps are sold, downside gaps are bought. $QQQ
@MarketSurge
#IBDpartner http://bit.ly/431EbVK

Rai: Most of the top successful traders keep saying "I take my losses quickly" in interviews. Make
sure you understand what they mean by that. Their entries are deliberate and at optimal points
where if it doesn't go their way they are quick to cut it and admit they were wrong.
Reply1: Absolutely right! Newer traders need to understand the importance of keeping R/R as
favorable as possible. Cutting losers quickly is the best way.
Reply2: Yes, you don’t have to wait for the price to hit your protective stop. Instead, carefully
read the price action and consider exiting early to cut your losses.

Many trading legends emphasize that there are typically 2 to 3 "sweet spots" each year when
making money in the market feels effortless. During these periods, everything aligns perfectly for
easy gains.
However, the rest of the time, the market often consolidates or declines, making it tougher to
navigate. This phase is crucial, as it prepares the market for the next opportunity.
Think of it like surfing: you catch those perfect waves when they come, but in between, you
paddle through choppy waters. Recognizing this cycle helps you stay patient during the tougher
times and ready to seize the next wave of opportunity when it arrives.

Burning desire and unwavering persistence goes a long way - more than you perceive in the
present moment.

Chart your losses. Learn from them. Print them. Look at them. That's one way to get infinitely
better.

"At the end of the day, the most important thing is how good are you at risk control" - Paul Tudor
Jones
Matt Petrallia, CMT
@theEquilibrium
A clear 'do nothing day' for me. Everyone is different but if you don't know when the odds of
success are decreased for your strategy then you don't know your strategy well enough.
下午 10:37 · 2024 年 9 月 9 日·

MM
This morning's rally is looking like nothing more than a technical bounce. One thing for sure, the
market came under selling pressure last week, now it needs to prove itself with accumulation
days in the indexes and stocks following through from breakout levels. In our most aggressive
proxy; the Minervini Select Trade Portfolio, we raises 82% cash and are now holding only one
position at a profit, $ONON. Longer term, the trend is intact, but with each pullback it's getting
closer to being challenged. Not to be confused with my individual stock trading, our long term
$SPY model (which is purely mechanical) is still holding its Jan 13, 2023 buy signal. It would take
more downside action to cause the model to start raising cash. The question is: do we
consolidate and rally, or is there more downside in store? Currently, I'm cautious and defensive,
but that could change in short order should the market hold up and present opportunities.
http://minervini.com
下午 10:33 · 2024 年 9 月 9 日

0911
Dan Zanger:
Cash is a position, and it's working well right now.
Don’t treat marke

Ameet Rai
@AmeetRai_
Don’t like a slot machine where you repeatedly put money in hoping for a positive outcome
There are times in the market where the probabilities of u making a return are very high & other
times where probabilities are stacked against ur system. That’s the difference

The single most important advice I can give anybody is: Learn from your mistakes. That is the only
way to become a successful trader. - David Ryan

All major indexes are below MA20 and even if I would takes trades there are no A+ setups for
me... No A+ setups = No trading Im totally fine with being inactive for weeks or even months
(that is just part of the trading style I have chosen)... Heading off to sauna... Enjoy your day!
If you get on the wrong train, get off at the nearest station, the longer it takes you to get off, the
more expensive the return trip will be.

when Livermore lost money it came down to 2 potential culprits: The rules for trading were not
fully formulated (not the case for most of his losses). The rules were not followed. For today's
traders, these are likely still the culprits that keep profits at bay. To be profitable, a trader must
actually create a profitable trading strategy, and then must adhere to it in actual trading.

Self-discipline begins with the mastery of your thoughts. If you don’t control what you think, you
can’t control what you do.

"Disregarding the big swing and trying to jump in and out was fatal to me. Nobody can catch all
the fluctuations." - more from Reminiscences of a Stock Operator (the wording was actually
Lefevre's)
I am so bad with smaller moves. I am focusing on bigger swings only right now. 100% buy side.
Equities only. Atleast that should bring some positive gains to my career.

https://www.youtube.com/watch?v=lGiCjOb1UVg&t=1347s
Trading Environment ULTIMATE Guide with Matt Petrallia: How to Adapt and Profit in ANY
Market
By Matt

Evidence of a poor trading environment

 Most stocks becom noisy: trendless, listless, range bound
 Increase intraday volatility with frequent reversals
 Individual names ignoring key levels, pivots, trendlines, MA’s
 Very low follow thru either to the upside or the downside
Characteristics of an optimal trading environment
 Clear, strong structural trend: higher lows, higher highs
 Low volatility: frequent trend days, unusual to see overnight gaps in both directions
 Stocks are supported in pullbacks
 High volume follow thru

Never ever Never ever not ever cancel a stop.

What if...?
No, never not ever.

Entry: tight & logical & technical

Optimal ingredients required for a specific style:

 Follow thru, momentum
 Clear trend
Characteristics of a poor trading environment:
 Frequent 1%+ overnight moves in both directions, means open +1% or -1%
 High volatility, freq 1%+ intraday reversals
 Weak mid-term trend structure, lack of follow thru in both directions(chop)
 News driven market

The harsh truth is, even if we all knew the Fed's decision tomorrow, we still wouldn't know what
the market will do.

Placing unnecessary pressure on yourself to perform irrespective of where you are in your
journey is detrimental to your trading. Some folks selling a dream say, "It should take 1-2 weeks
to learn setups and be profitable." This is ridiculous. Mastery takes years, not days.

Why haven’t you found “the secret” after all those books and videos and webinars? Because
there isn’t one. Discipline - Risk Management - Situational Awareness - Process - Experience /
Instinct The real goal is longevity.

100% agree. Van K. Tharp said the commonality between successful traders was that they had a
system/methodology that suited them. That goes beyond just finding a good entry signal but that
is all that traders want to focus on!
They offer a ton of insight and great information actually. It all lies on the fact on whether you can
handle your emotions, and stick to your plan.
stockbee
@PradeepBonde
I value creativity more than discipline in trading.
Creativity is required to find unique low-risk setups or trade the same idea differently. Or to find
alternative entry or exit techniques. Or to develop unique processes or use or develop unique
indicators. Creativity is required to solve your trading problems.
For setup development and solving trading problems, creativity and innovation are essential.
Once you have a creative setup idea, executing it requires discipline.
Mindless discipline is not the key. If you want to be a profitable trader. Be creative. Be innovative.

Look for creative ways to scan for trading ideas. Look for alternative entry and exit strategies.
Question assumptions. Ask what if I do this differently.

I agree with you. I see so many people talking about discipline, emotional control, et al. But the
base of it all, after which the other things become relevant, is creativity, or in other words, set-
ups.

0919
$XBI is showing a gorgeous VCP base here and now it has further confirmation of a larger rate cut
option which would obviously benefit the types of businesses in this biotech sector. You want to
stack confluences of TA and thematics like this to increase your odds of success.

$COHR - another AI-related stock breaking out to new 52-week highs. One of Druckenmiller's
larger holdings.

The smartest traders I know:

- Read books
- Are dreamers
- Seek feedback
- Learn from errors
- Admit their mistakes
- Don't get stubborn
- Are open to suggestions
- Are comfortable changing their opinion
- Surround themselves with intelligent traders

My mom sent this to me in Chinese: : 逆境永远是机会的开始 " It translates to "Adversity is always the
beginning of opportunity." She also sent me "危机" which means crisis. But looking deeper into the
Etymology, the characters translate to 'danger' and 'opportunity'. The best traders and investors
have this mindset too. When there is a crisis, they see opportunity over danger. Overall emotions
are high leading to irrationality leading to opportunity. As Napoleon Bonaparte says: "A genius is
the man who can do the average while everyone else is losing their minds"

@AnthonyCrudele
My rule for the past two decades on Fed Days:
Day 1 is the overreaction.
Day 2 is the reaction to Day 1.
Day 3 we find out what the market really thinks about the Fed decision.
Be patient. Don't overreact. Don't have FOMO. Let time be your friend, not your enemy.
下午 8:59 · 2024 年 9 月 18 日

@paxtrader777
I have never had my best day on a Fed day. I have had my worst trading day in a rate change on
Jan 3, 2001 when Greenspan did a surprise .50 pt rate cut on the 1rst trading day of the year. I
lost 1.5m of my own money in 5 minuets, money I never dreamed of having 3-4 yrs previous. I
can tell that stpey later if you want. The NQ rallied 26% in 5 minutes. Biggest rally in history. I was
short 28 big NQ. Since than I have avoided days like today. Let the decision & the VIP presser
settle into price action. Dont gamble with your money. If it isn’t clear, manageable or easy I don’t
want it. Live to fight another day.
上次编辑下午 8:48 · 2024 年 9 月 18 日

Cutting out the randomness and sticking to setups you trade best is the way to profitability.

Setups and technicals are the 'easy' part. In my view, reframing your mindset can be where the
biggest progress is made as a trader. Check out a recent Members' Webinar: The Traders' Journey
where I speak about the goal of Decision-Making Clarity.

There are only two ways to get aggressive: 1 - Sizing up / leverage 2 - Letting trades run (pressing)
That's it. There's no magic bullet. The biggest impact on your returns comes from employing both
in a conducive environment to your style. Focus on impactful decisions.

Elite Swing Traders

@1ChartMaster
When I stopped trying to hit the home run all the time and started focusing on singles and
doubles my consistency improved dramatically.
下午 8:43 · 2024 年 9 月 19 日

@theEquilibrium
So many look for guidance on "what to do" heading into FOMC. Like just about everything in
trading it's about risk management, and YOUR personal risk tolerance. For me it's simply keep on
open trades that have a cushion; don't open meaningful new risk directly ahead of the event. But
everyone's risk tolerance is different and YOU are literally the only person on the face of the
earth that can answer that question for yourself! We saw how the algos hijack the entire equities
market for a couple of hours yesterday. How much risk are YOU willing to have open during that
volatility? Only you can answer that question. Start thinking for yourself instead of asking for a
'formula' that doesn't exist. Your common sense will empower you.

"Patience, persistence, and perspiration make for an unbeatable combination for success." —
Napoleon Hill

Richard Moglen
For me when a stock closes low in the range, especially when it undercuts/tests key levels and
then the next day gaps up and strengthens that is a positive expectation breaker.
It can be an excellent entry point in context within a strong larger pattern/setup.
Stop can be placed tightly at day lows after an early morning intraday base and breakout

As a reminder, risk management isn't just spotting where to sell your losers. It's also about:
· Profit taking
· Position sizing
· Selling in partials
· Financing your risk
We're taught that risk is a bad thing. In reality, risk is an opportunity when handled correctly.

Elite Swing Traders

@1ChartMaster
Find the sector ETFs that are setting up the best. Then go roll up your sleeves and dig in to find
the best tickers setups in that sector. This is some of the best advice I was giving and I use it every
week . Do the homework and the setups keep coming.

Regardless of the macro, fundamentals, what pundits and talking heads are saying, an all-time
high close on $SPX is never bearish. Keep it simple - good above the line; bad below.

if u cannot make $100 a day consistently, how do u expect to make $1,000/day? be consistent
first with SMALL size then gradually move up. b/c when more size is put on, so will be the added
pressure & anxiety! it's not just the technical skills u must master, but also the mental

My dad told me this when I started trading 12 years back “If you get on the wrong train, be sure
to get off at the first, stop. The longer you stay on, the more expensive the return trip is going to
cost you"

TraderLion
@TraderLion_
If you're constantly micromanaging trades on a daily or intraday chart, it's time you start
exclusively trading off of the weekly timeframe.
Why?
Answer this question: Does the trader on the left look like you?

A lot of trading and nothing to show for it.

There's nothing more frustrating than trading for an entire year just to realize you would've been
better off simply buying the S&P 500 and not trading at all.
So if this is you, what can you do?
Switch to weekly charts.
Weekly charts help you:
· Reduce noise from daily charts
· Visualize the long term trend
And more importantly, executing solely on weekly charts reduces the amount of entry signals you
may have.
The Problem With Daily or Intraday Charts
If you've been trading off daily or intraday charts, it's very likely you've been shaken out by the
constant urge to respond to news, mini gap ups/downs, or volatile intraday action around pivot
points/moving averages.
Strictly trading weekly charts not only will boost your patience, but will also lead to fewer, yet
more meaningful decisions.
Ensuring Your Strategy matches Your Personality

If you're:
· Indecisive and don't want to make daily decisions
· Prefer holding over constantly adjusting positions
· Easily tempted to act if you watch the market daily
· Impatient & know that you lack the discipline to sit
It's very likely your edge is found by trading the weekly timeframe.
At the end of the day, simplicity wins in the market (no matter what other people on social media
tell you). You must find a system that matches your personality, and one that is easy to
understand/execute.

If you're able to identify who you are as a trader, and you know you already have an edge, you
can easily run through the simplicity formula above.
And, if you match any of the character traits we've outlined above, it's likely you're going to be an
effective weekly chart trader.
Extending your timeframe can act as the simple spark you needed to reduce your trading volume
& increase your returns (so you can finally beat the market in a big way). ––
We hope some of the concepts above resonated with you. This post is a trader case study from
one of our own, @NickSchmidt_
. He's been trading for 10+ years and finally found his edge by matching his system with his
personality.
If you're serious about becoming a profitable trader and beating the market, you'll do the same.

怎樣變得富有？ 第 1 步：增加你的收入， 第 2 步：保持盡可能低的生活成本， 第 3 步：剩餘的錢全部用於投資。 簡單，但不容易做到。

最高等級的財富，是可以控制自己的生活。能夠隨心所欲地做自己想做的事，想做多久就做多久，這種能力是無價的。 這是金錢所支付的最高級的紅
利。

沒有人能夠預知未來，然而很多事是可以通過邏輯推理來獲取方向上的模糊正確。邏輯正確的事情，隨著時間推移和大量案例累積，就必然會產生好
的結果——你可以把這看作是「遠見」或「眼光」——無論是做人做事、做學問還是做投資都是適用的。

“A bull market is like sex. It feels best just before it ends.” - Warren Buffett

“If you can learn to create a state of mind that is not affected by the market’s behavior, the
struggle will cease to exist.” – Mark Douglas One of my favorite quotes by Douglas

Market myths: You can't go broke by taking profits. Yes you can. It is those big winners that pay
for several small losses and then make the year for you. That is why in almost every trading book
you read: cut your losses short, let your profits run.

Trading burnout is real. I kept pushing through exhaustion and stress thinking I had to prove
something to myself. I learned the hard way that taking a break is part of the process too.
#TradingBurnout #SelfCare #MindsetMastery
Did FOMO get you again? Jumped in late, and of course, the market turned? What helped me
with FOMO was learning that patience isn’t about waiting, it’s about trust—trusting that my
opportunity will come. #FOMO #PatienceInTrading #TrustTheProcess

It may sounds strange but I dont see myself having any trading "rules"....
I dont belive in the word "rules" because it feels like forcing things...
I never even think about the word "rules"...
I only have directed wills...
For example: I only want to buy stocks in a rising market...
I only want to obey my stops...
I only want to buy stocks that have a fundamental reason to go up...
What is the reason to enforce rules if I deep down don't want to follow them? It will only be a
matter of time before I break them anyway...
The KEY for me was to first get to know my wills. Basically doing a multi month review of past
trades looking at tendencies. Writing down all details like a detective.
Second was to change wills/tendencies that was not profitable. I needed to brainwash myself
over some time (with statistics, chart examples, pnl results from non profitable tendencies,
quotes, printed out charts of past trades) until I saw in my new trade history the wills/tendencies
had changed. Some very rare times it happend by itself because a market experience was
extremely painful....
But the whole process started with a GENUINE want/desire to change myself, and that only came
after a lot of account blow ups...

@RichardMoglen
One of the key things that stood out to me from my recent interview with @BrianLeeTrades was
when I asked about risk. Brian mentioned obviously cutting losses is job #1 but he also thinks
about the risk in not being properly position sized in a A+ trade. https://youtu.be/DPA35Gug3Y4
上午 1:41 · 2024 年 9 月 30 日
Lee Tanner when I talked with him this year also mentioned a similar thing, that one of his
biggest mistakes was not being exposed enough during uptrends. You have to swing the bat to
get hits, even if you might strike out. 这里说的 exposure 应该包括资金量和持续时间。

4/7 Many people think that if their emotions are causing them to break the rules, they should
deal with those emotions. However, emotions in trading are triggered by "understanding," so you
need a different approach than dealing with ordinary, primary emotions. That’s why I always say
not to look at the emotions themselves, but rather the thought processes behind them. And
deep understanding is not just knowledge. Deep understanding comes from experience. Nothing
will convince you more than experience. You need to repeatedly experience that continuing to
follow the rules truly leads to profits. This is not understanding through knowledge, but "deep
understanding." When you truly stop caring about the immediate wins and losses, and you
deeply understand through experience that continuing to follow the rules brings you profits and
leads to success, you will begin to feel a strong aversion to breaking the rules. Your
"understanding" will have changed the emotions you experience.

The exact moment trading became boring for me was the exact moment I stopped doing
everything that was causing me to lose money.

Not he greatest momentum market when my 5D 20% up screener only produces 15 names. On
the other hand, if its 100+ names show up consistently, the market might be too stretched.
Tom, your trading style is so very different from all of the clickbaity loud traders. It's so powerful
to see you sit and wait for perfect setups to come to you. Thank you for the lessons in patience
and process. I will see you at Raen soon.

When something hits your stop, you get out. You don’t hesitate nor do you fear that it will
bounce back.

Reviewing your trade log, trade by trade. Doing so will change your trading forever.

如果發生了一件事，與我的預期完全相反，並且烈度非常高。大概率我需要調整自己的邏輯。

One trader told me, "I don’t have enough time to journal my trades." I pulled up their screen
time—3 hours on social media. The issue isn’t time; it’s priorities. You have the time, now use it
wisely. #TimeManagement #MindsetCoaching

Trading is one of the only jobs that allow you to change your life by yourself, be indipendent, be
free and have a brilliant carreer.
No matter where you come from, your race, your sex, your background studies, trading is for
everyone.
Trading does not care of your ideas, your heritage, if you have a degree. Trading does a natural
selection.
Trading is about skills, dedication, discipline, patience.
Good morning traders, this is your TIME NOW! GIVE 100% and I promise you results will be there

In the past few months of trading, I've shifted my focus significantly towards understanding the
broader context - the nature and quality of trends, as well as the overall market environment -
while giving less emphasis on setups, which I now primarily consider as mechanisms for entry
and exit.
Same here. I pay much more emphasis to fundamental triggers through management
commentary and macro tailwinds to understand the quality of the trend. Result is much better.
Setups are just low risk entry points and moving averages to trail the gains, on 20/50 MA.

@AmeetRai_
Reviewing your trade log, trade by trade. Doing so will change your trading forever.
下午 12:35 · 2024 年 10 月 1 日

Difference Between Textbook Setup Entries & Dynamic-Theme Setup Entries :

When you study dynamic setups which are often ''Theme'' related you will see that sometimes it
is hard to enter. Sometimes they give 1 perfect entry or no perfect entry at all. When something
falls into that category I personaly value the Theme >Textbook Entry.
$NIO shook me out after the 1st day entry but I was willing to chase a bit and ''deviate'' from the
original rules.
The only advice here is that you must first learn what seems powerful and maybe can transition
into a theme because if you don't then overtrading can become an issue.

Did you ever ask yourself why you cannot size into a trade, why some traders can grow their
account so fast while every time you try to size, you end up taking massive losses?
It is not because of the strategy. It is about instead your self confidence. It is about your
conviction to perform when you feel uncomfortable.
Some traders can trade stress free, other perform better under stress as @TheShortBear for
example was telling, others instead feel the pressure, others can have anxiety, others are afraid to
lose money and underperform.
I invite you to reflect and think how you can learn to listen yourself and understand how to not
sabotage your trading.
One of the keys to pass from being a mediocre trader to become a superstar is all here.
Feeling the pressure is normal but learn how to capture it, control it and utilize it to your
advantage - a similar concept to who practices Aikido where you leverage the strength of your
opponent against him.
Some tactics to control this aspect are simply very simple that include meditation, breathing,
yoga, martial arts.
So before sizing up next time, fix first yourself.

I used to overtrade to make up for my losses. But revenge trading only digs a deeper hole. The
market doesn’t care about your emotions, but your account balance will. Stop chasing. Start
resetting. #RevengeTradingTrap #MindsetMatters #TradeSmart

“If something is going to crash the market, it’s going to be something unknown. Experts are
usually always wrong” ~
@Qullamaggie
This makes total sense because big moves stem from events that ARE NOT discounted by the
market - like this recent People’s bank of China pivot.

@markminervini
With bullish sentiment elevated, put volume low, Middle East tension and strikes at US ports will
likely keep volatility elevated in the near term. The VIX is near the 20 level. In order to get
aggressive, I would like to see volatility come down while at the same time having breakouts start
to work better. The IBD50 is building a base. I think a breakout on that index would be a good
proxy for the start of a better market for breakout traders. http://minervini.com
下午 10:25 · 2024 年 10 月 2 日

Quote of the Day: "If you're not trading well at 25% or 50% exposure, there is no reason to bump
your exposure to 75%, 100% or on margin" ~
@markminervini

The recognition that doing nothing is the right thing to do now, and the ability to "just wait
without any impatience" is an invisible but significant skill that separates excellent traders from
others.

$TKO The ticker doesn't matter. A couple things that you will continue to notice is many of the
moves start with an earnings gap up and they also like to shake off or "squat" prior to the real
move. 上午 1:48 · 2024 年 10 月 5 日

RDDT, hard to ignore as I love the fundamentals but it has ZERO EPS (down thumb) and is
emerging from a short 6 day handle (down thumb). Not all breakouts should be bought.
Selectivity is a Superpower. I hope everyone has planned a double Kick Ass weekend! If yes, what
are you doin

Why haven’t you found “the secret” after all those books and videos and webinars? Because
there isn’t one.
Discipline
Risk Management
Situational Awareness
Process
Experience / Instinct
The real goal is longevity.

@AmeetRai_
2024 Market Cycles
January 18 to April 3: +53 days （这两段时间都是 10、20 MA 朝上的时候）
May 2 to July 18: +52 days
Biggest Down Cycle
July 19 to August 12: -16 days
Two +50 cycles in the same year = good swing trading environment.

My best trades always start with two key signals on the weekly chart:
Character change 1:
After a stock has been beaten down, it often goes into a long period of doing nothing… just
basing for months, sometimes even years. Nobody’s paying attention to it at this point.
But then out of nowhere it explodes out of that base on huge volume. This is character change 1.
That big volume move is a trend igniter signaling that something’s brewing… but it’s not a buy
yet. I add it to my watchlist and keep a close eye on it.
Character change 2:
The real buy signal comes when the stock pulls back after that big move and holds a higher low
(either at the 10-week or 30-week moving average). This is the confirmation I’m waiting for and
what i call the second character change.
It’s when the stock proves the trend shift is real and that’s when I make my move. The beauty of
waiting for this second character change is it offers incredible risk/reward. Tight stop, massive
upside.
Patience is key.
The first big pop gets it on my radar, but it’s the second character change that creates the perfect
low-risk entry. If you wait for both of these you’re setting yourself up for some of the best trades
out there.
上午 3:23 · 2024 年 10 月 4 日