Correction Territory: Be The Lion In The Chaos

2020-02-27 | Simpler Trading Team

In this highly volatile, negative market that pushed into correction territory, traders would do well to start thinking and acting like a lion.

Lions sleep and hunt pretty much most of their lives. Traders can follow a lion’s lead and step back to rest (at least mentally) while the market plays out.

When lions hunt, the scene can get chaotic (volatile). Lions don’t try to hunt all the antelopes in a herd of 20 — they key on one target and make sure they get dinner.

Likewise, savvy traders won’t chase every possibility in a volatile market. There’s nothing in the trading world that says you have to participate in this hunt.

Insightful traders stay focused on specific areas or stocks within volatile markets and stick with that plan of attack.

Many Simpler Trading moderators use the Squeeze Pro indicator to track opportunities in this volatile market.

John Carter, founder of Simpler Trading and best-selling author, singles out stocks that are doing their own thing in a very negative market. He tracks these independent targets using a 78-minute chart with the Squeeze Pro so he can maintain his trading within an orderly plan.

Logical opportunities will present themselves, so be rested and ready when they come into view.

Always be asking: “What are the moves from right here?”

No matter your trading plan, remember that the main goal is to keep what you have.

Don’t get pulled in by the news and market emotion that pushes you to target too many possibilities at one time. Chasing the hysteria will leave you tired and hungry.

We Saw: highly volatile markets from open to close — 

  • President Trump couldn’t ease coronavirus effects on markets
  • Sacrilege: TSLA continuing its free-fall?
  • Correction territory hits: markets down 10% off highs

We’re Watching: for a bottom and a turn —

  • Talk of bear market territory? (markets would be down 20% off highs)
  • Are patterns showing a reprieve from selling or a buyable bounce?
  • Stalking a NASDAQ reversal? Not yet, but lying in wait for it

Discover more about “orderly” trading -- learn how the “squeeze” guides traders.