by Harlan Pyan, All About Trends
Editor's note: This article was written midday Tuesday, 01 October 2013)
Just look at our watch list and current holdings. It’s all about using sound chartist principles and trading what you see not think hear or fear all in the face of? Uncertainty and fear of course.
Over last weekend we said:
“In the meantime rather than stew over what could or could not happen let’s pay attention to what the charts are saying as we trade what we see around here. That said we have a lot of names that are setting up.”
Lastly, let’s back up to the June lows and the September lows for a moment again. Know what those lows had in common with our current market dilemma? One word: UNCERTAINTY
We’ve all heard the phrase markets hate uncertainty right? Well psychologically that’s another reason why markets look like they do. Know what happened once the uncertainty was removed? We took off with the biggest part of the move taking place in the form of a gap. Once the veil of uncertainty was removed keep in mind one also ended paying up for anything they bought vs low risk entry points. Think chasing a bus in a micro time frame. That’s the price one has to pay for certainty. From a chart perspective? It also will mean buying away from the low risk entry point hence more chart pattern risk vs closer to a support, so in a weird twisted sort of way waiting for the certainty means actually taking more chart pattern risk.
For us back then it was all about what we were seeing in the charts of many individual stocks out there coupled with the indexes tagging supports and key Fibonacci retracement zones all in the face of uncertainty fear. This current climate looks strikingly similar so let’s pay attention to the action vs. the noisy news.
Are you paying attention to the market or the news? If you’ve been trading alongside of us you need not have to answer that question. Why? Because we pay attention to what our stocks are actually doing vs what we think hear or fear, which goes hand in hand with TRADE WHAT YOU SEE.
All the while the fear of uncertainty has dominated the headlines we stuck to our guns and focused upon what is actually taking place vs Chicken Little the sky is going to fall.
All of the above are solid CORE BELIEFS that YOU MUST INGRAIN IN YOUR BRAIN in order to make it through what always looks like turbulent times. We strongly suggest you make those beliefs a core part of who you are! We can not stress this enough, just learning that alone is worth the price of a monthly subscription around here.
Case in point? Take a look at QIWI today (Monday 30 September)! We traded what we saw all in the face of uncertainty as the stock was tagging the 50 day average as shown yesterday when we took the trade.
Now take a look at it (Tuesday 01 October).
We bought a measly 200 shares yesterday at 31.23 and this morning sold it as it was spiking at 34.53 just before it ran to 36 for a gain when all said and done of $660.00 in less than one business day.
So you see? It does pay to let your stocks tell you what to do by the action they are exhibiting all in the face of uncertainty fear.
As for the indexes?
Game Plan For Next Week
Given we have a lot of exposure here we for the most part are going to work with what we have for the time being. We still have more names setting up so keep an eye on the long side watch list.
Editor's note: This article is an excerpt from Tuesday’s premium update at All About Trends and reposted from Zentrader.ca. Enjoy a free 15 day trial to the All About Trends premium service and receive daily stock picks, market analysis, and a complete trading plan. Promo code zen for a special offer.
About the Author
Harlan Pyan is the co-founder and co-owner of All About Trends, a subscription based newsletter service focused on helping individuals secure consistent profits in the market by buying leading stocks at alternative entry points and trading what they see - not what they think, hear or fear.