Breakouts and Crossovers - Late to the Party
The arena of trading is a fantastic one in itself.
It has to be the largest business on the planet.
Thousands upon thousands of eyes are glued to the screens around the world, waiting to buy or sell at any given moment.
As I have said before, I like to use analogies when it comes to trading successfully.
This is due to the feedback I have gotten from students and traders, who have said they 'got it.
' Here goes.
Trading breakouts and crossovers are like arriving to a party late.
Allow me to explain.
In my single days, I had a buddy I would go out with occasionally.
Today, such a person would be called a 'wingman.
' However, we would often clash, because he would insist on arriving a parties early.
I came from the school where there was such thing as being "fashionably late," so this was different.
This changed when he told me his reasoning.
By getting to the party early, there was usually little, if any, fee to get in.
Free parking was usually easier to find, whereas later, Valet parking was the only option.
Upon entering, food was prevalent, and most importantly, he had the ability to find a strategic seat to see and be seen.
Because of this, he always appeared comfortable, and at ease.
He did extremely well, for he was always chatting and holding court.
I use this analogy because trading breakouts and crossovers are like arriving to a party late.
Most traders have been taught to trade breakouts and crossovers exclusively, going with 'the momentum.
' But what does this say? It says that at the price turnaround, the trader did not have the ability to read this and climb on board.
The movement started a long time ago.
Trading breakouts is arriving 'late,' and does not offer the best risk vs.
reward, an essential component to successful trading.
This can be avoided if and only if a trader develops core skills in reading bar charts in the manner a musician reads musical notes.
Each and every bar on the chart has a meaning.
Not just a definition, but a meaning.
A meaning in terms of supply and demand.
When we learned to read words, we first learned the meaning of each letter.
When one learned to play chess, each chess piece had a meaning.
So is it in reading charts.
Sadly, most traders have not learned this vital skill set.
Learn this and trading becomes exciting.
It has to be the largest business on the planet.
Thousands upon thousands of eyes are glued to the screens around the world, waiting to buy or sell at any given moment.
As I have said before, I like to use analogies when it comes to trading successfully.
This is due to the feedback I have gotten from students and traders, who have said they 'got it.
' Here goes.
Trading breakouts and crossovers are like arriving to a party late.
Allow me to explain.
In my single days, I had a buddy I would go out with occasionally.
Today, such a person would be called a 'wingman.
' However, we would often clash, because he would insist on arriving a parties early.
I came from the school where there was such thing as being "fashionably late," so this was different.
This changed when he told me his reasoning.
By getting to the party early, there was usually little, if any, fee to get in.
Free parking was usually easier to find, whereas later, Valet parking was the only option.
Upon entering, food was prevalent, and most importantly, he had the ability to find a strategic seat to see and be seen.
Because of this, he always appeared comfortable, and at ease.
He did extremely well, for he was always chatting and holding court.
I use this analogy because trading breakouts and crossovers are like arriving to a party late.
Most traders have been taught to trade breakouts and crossovers exclusively, going with 'the momentum.
' But what does this say? It says that at the price turnaround, the trader did not have the ability to read this and climb on board.
The movement started a long time ago.
Trading breakouts is arriving 'late,' and does not offer the best risk vs.
reward, an essential component to successful trading.
This can be avoided if and only if a trader develops core skills in reading bar charts in the manner a musician reads musical notes.
Each and every bar on the chart has a meaning.
Not just a definition, but a meaning.
A meaning in terms of supply and demand.
When we learned to read words, we first learned the meaning of each letter.
When one learned to play chess, each chess piece had a meaning.
So is it in reading charts.
Sadly, most traders have not learned this vital skill set.
Learn this and trading becomes exciting.