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HELPING TRADERS SUCCEED “The human side of every person is the greatest enemy of the average investor or speculator.” ~ Jesse Livermore

Do’s and Don’ts in trading

Do’s and Don’ts in trading

The science of trend allows you to build systematic rules to play these repeating formations and avoid the chase:

  • Forget the news, remember the chart. You’re not smart enough to know how news will affect price. The chart already knows the news is coming.
  • Buy at support, sell at resistance. Everyone sees the same thing and they’re all just waiting to jump in the pool.
  • Don’t chase momentum if you can’t find the exit. Assume the market will reverse the minute you get in. If it’s a long way to the door, you’re in big trouble.
  • Trends test the point of last support/resistance. Enter here even if it hurts.
  • Trade with the TICK not against it. Don’t be a hero. Go with the money flow.
  • If you have to look, it isn’t there. Forget your college degree and trust your instincts.
  • The trend is your friend in the last hour. As volume cranks up at 3:00pm don’t expect anyone to change the channel.
  • Avoid the open. They see YOU coming sucker
  • Bulls live above the 200 day, bears live below. Sellers eat up rallies below this key moving average line and buyers to come to the rescue above it.
  • Price has memory. What did price do the last time it hit a certain level? Chances are it will do it again.
  • Big volume kills moves. Climax blow-offs take both buyers and sellers out of the market and lead to sideways action.Trends never turn on a dime. Reversals build slowly. The first sharp dip always finds
    buyers and the first sharp rise always finds sellers.
  • Bottoms take longer to form than tops. Greed acts more quickly than fear and causes stocks to drop from their own weight.
  • Beat the crowd in and out the door. You have to take their money before they take yours, period.
Trading Monk

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