A big part about gauging the momentum correctly is being able to see what the markets are showing you and react to those signals in the correct manner.
Am I able to do this time after time with what may appear to be magical precision but it really all comes down to my simple method relentlessly applied.
I don't read or listen to any news about the markets so I do not have pre-conceived notions about what the markets will do. This frees my thinking and powers of observation up to see what the markets are actually doing and not focus on some crazy idea planted in my head.
I don't have favourite stocks or fall in love with any company. I trade familiar stocks that exhibit trading characteristics which have shown me they fit into my trading system-low spread, high volume, large daily trading ranges. I don't care and frequently don't know what a company actually does. That is irrelevant to me. Stock symbols are simply letters and portals to profits to be used and discarded when their usefulness ends.
I am prepared mentally before the day begins through my visualization and affirmations. The moment I wake up I start to picture in my minds eye what my edge looks like long and short, what typically market formations I will see today long and short although I don't know when they will show up. Beginnings, middles, ends.
I have plans in place to tell me where to set stops, when to add size to winners, when to take profits, when to take losers.
I never take on too much risk. I rather like to put on more trades. Too much risk will affect your decision making process.
I have no profit goals. Every day is a new day. The markets will present opportunities and it is up to me to utilize them or not. I don't get a salary from trading but the bonuses are spectacular.
I don't know what the market will do or what a stock will do. I don't think I know beforehand if a stock will go up or down. What I do is play the probabilities happening based on what the markets are telling me and what my experience in connecting the various signals I am getting.
When you can do these things you can see what is happening or is likely to happen with great clarity and simplicity. I'm prepared to trade any direction, any stock that fits my criteria on my terms. It's all about spotting and using the opportunities as they are presented to me.
I don't fight the market or myself. I am in harmony with both.
I know a lot of this flys in the face on conventional wisdom, but the CW is wrong. You don't need to watch CNBC. You don't need to know anything about a company. Frankly the less you know the better off you are as a trader. You don't need to know what will happen next if you are prepared for anything to happen.
You can see that applying my system/edge/plan to the opportunities is not magic but only my method.
