Is Trading like a business?
Income from sales from a product or service will be generated but not with out expenses and losses , the objective of a business is to maintain an overhead and profit substantially while accruing minimal loss and expense.
It is important to have a strategy and planned business in order to get the best production and be successful.
Trading is and should be treated like a business
Trading is not different you have profitable trades , losing trades , you pay broker fees,pay tools, websites, scanners , you must manage losses and maintain productivity using risk management and money management.
Trading should be run like a good business
In trading you have :Revenue - Winning Trades Expenses -Losing Trades
A Trading curve does not go straight up
Traders must understand that they will have a capital curve , some traders use profit.ly some have Etrade 360 and can see this curve with there brokers understand that you will have an up and down curve but objective is to have it on a uptrend incline rather than seeing just a even plateau or parabolic move high then big low erasing any gains
Myth: Successful Traders never lose, that couldn't be farther from the truth, solid traders manage gains and losses
"Its not whether your wright or wrong thats important,but how much money you make when your right and how much money you lose when your wrong " - George Soros
"80% of your profits will come from 20% of your trades" -Paul Tudor Jones
Risk Reward and Probability
Divergence is that dotted red line that shows the move lower, We have taught members that this is the level in the stealth phase to add to a position rather than wait until a stock is promoted or above the moving average it is a great opportunity to add at red parallel line or arrow since it is the confirmed bottom many traders will not buy this level as they are costumed to wait for the breakout , the moment they chase they buy at or above the breakout they take a loss because they got in way too late and then they sell for losses the smart traders wait for that confirmed bottom buy the capitulation or stealth range and sell higher
These are text book probability trades that allow traders to set buy zones and have mental stops that limit risk , there is psychology involved understanding that you are taking low risk compared to higher reward must give traders confidence to hold and accumulate levels at lows
Traders that wait for stocks to break MA levels are giving away profit , traders that await power zone RSI or hype take on more risk while traders that buy the stealth give maximum potential and lower risk
For traders that short or trade options same setups except on the down side many of the setups given show that dotted line divergence signalling either a top or bottom in this case it is a market top.
Usually in between you will have 20 days of a move therefore its is essential to take on more time when buying contracts , you will see more significant move and take on less risk
When traders understand to be more mechanical and less emotional they will become better traders as a whole.
Fact is that trading is systematic and most bad trades are caused either by hype or emotion , if traders have a disciplined plan and adhere to a specific strategy never changing or taking short cuts they will likely do well rather than lose most of there investment 80% of traders trade each stock differently that is why likely 80% or more fail at trading
Pull Trigger when Setups are executed
False Breakouts and STOPS
Traders use stop losses or jump in on breakouts , they usually lose money some traders will quit a team mainly because they do not get into the hype parabolic plays and listen to all the jive that 400-1000% was made and missed opportunity
Well then good luck, false breakouts or chasing causes traders to either buy high sell for lows
And on Options when false breakouts happen they usually STOP out not abiding by STOP on MARKET CLOSE
High Frequency Trading STOPS you out SMART MONEY tricks you!
Why? Because High frequency Traders algorithms in bigger markets squeeze out STOPS and get STOP triggers then they push markets higher always await close confirmation
For OTC same thing , seen many traders lose opportunity with REDG , TBEV the latest where traders stop on emotion and stock rallies thereafter
Which is strongest support A or B?
The Answer is A
The answer is A because that is the master support bottom and with the level being tested more than 3 x shows weakness and a bias that the stock likely break that level lower , now understand that the A is the lowest point up until now so should understand that studies show that is the level more traders or investors will be willing to buy raising probability profitable trade
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