Trade Association
I’m not talking about joining
a club. Trade Association is much worse. “Trade Association” is when we remember
a bad trade we had in the past and associate that trade with a current trade
or current set up. The association puts fear in our thinking and causes us not
to take the trade or to only take a very small trade or…you know what I’m talking
about. Let me give you a great example that happened yesterday and today.
Below is a daily chart of
(
SBC |
Quote |
Chart |
News |
PowerRating).
Our subscribers were looking for a possible trigger to short this stock
as it was hitting key daily Fibonacci price resistance as well as time cycles
for a reversal to the downside.
In the subscriber chat room,
we drilled down to lower time frames yesterday to look for a trigger to get
us short. On the 15 minute chart below, we were given a nice double-top formation
against the daily Fibonacci resistance from the chart above. So I got short,
the stock initially moved our direction then… WHAMMO! I get stopped out for a
small loss. No worries, right. Right?!
So yesterday, later in the
same session that I got stopped out, look at what shows up again. A freakin’
double-top formation! Now, wait a minute. Earlier I just got stopped out using
a double-top pattern. This stock sure is strong. I better lay off. That’s where
I had to put on the brakes. I can’t associate a previous setup with a current
setup. The market is dynamic. I have an edge and I have a trigger. If the trigger
presents itself, I take the trade and accept the risk. That simple. So anyway,
below is the second double-top pattern, and as you can see, the stock gapped
down almost 2 points this morning after getting yesterday’s double-top entry.
We were rewarded nicely for not joining the Trade Association.
Good night!