How to Trade Around the Irrational Market
This market is making less and less sense each day.
Just look at SNAP INC’s earnings as a recent example.
When I say the report was great, that’s an understatement. They beat Earnings Per Share (EPS) by more than 1,051%! The only thing they left out was forward guidance…
With earnings like that, who cares, right?
Well, the stock tanked…
As time goes on and the market movement continues to become more irrational, its predictability goes right along with it.
The ONLY way you can trudge through this and come out the other side with profits is by getting your hands dirty with some hand-to-hand trading.
I’ve been using this guerilla trading style in my services for a while now, and I want to break it down for you so you can better understand how I’ve implemented it in my trading.
But, most importantly – how YOU can implement these tactical trading strategies yourself.
By the end of this story – and this is just part one – I want you to become so familiar with these indicators that I could hand you a chart upside down with no ticker symbol on it, and within a second you can tell me what trade you would place.
Why this market is acting irrational
For years the Fed has been putting the plane on autopilot for you, as they just pump money into the market all willy-nilly. It is easy to look at them and point the finger saying, “The Fed is who’s at fault.”
Unh-uh – no, it wasn’t.
There are all kinds of issues and arguments that you can make for it.
We all were falling victim to a culture that we created, thinking that just being in the market was easy money for everyone – no questions asked…
We were spoiled during the pandemic with stocks that could double in price without a second thought.
There was a mindset that stocks don’t go down.
Those days – although they were fun – have come and gone…
You can no longer just sit back and relax on autopilot.
In a market like this, you have to use hand-to-hand trading.
What is Hand-to-Hand Trading – and where to start
Stocks go down for reasons most people can’t see.
This is why having the ability to pivot your trading style on a moment’s notice is imperative to your success.
You have to go through and look at the data, look at the technical indicators, take your experience, and listen to your gut. You know what has to be done.
But I want you to know something – even the best traders don’t bat 1.000. If they say they do, well, they are lying.
You need to start trading this market as you see it – not as it presents itself. By that time, it is too late.
This is what I have been doing in my Night Trader and Penny Nation services – and what I am about to start doing in my Double Your Money challenge.
Now, what do I mean when I say “trade as you see it – not as it presents itself?”
It all comes down to understanding the data. The market, no matter how insane it wants to act, will respond to my indicators in a specific way.
That is why we use them, they indicate what the market’s next move will be based on how a given stock is positioned around the given indicator.
For example – Bollinger Bands are the natural range the stock will want to trade within. If it touches the top band, the market will resist the position going higher with an increased selling pressure. When you see that, you should expect the stock to peak and go back down – this is what I’m talking about when I say “mean reversion.”
What makes this even simpler is that it works in the other direction as well…
When a stock touches the bottom band, it will find both support and a flurry of new buyers lining up to drive the price higher.
Things aren’t always so cut and dry to say it will go back to the exact center of the range. That is why you need to understand a few indicators to get the full stack of data and trade.
But that’s why you have me, so I can teach you about those indicators every day. That way, you’ll be able to use them in your sleep.
This may seem a bit rudimentary because it requires more work on your end – but it isn’t.
It’s a method that’s worked every time and will continue to work… as long as you do the same.
On Saturday I am going to continue this story – that is when ill be done celebrating my Amazon puts.
Be on the lookout – I am going to break down each indicator I use so you can know exactly how I use them.
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October 27 2022
