Turn Losing Cycle Into Winning Plan

2021-08-24

Last week's market losses were replaced this week with all new highs across the major indexes.

In fact, the Nasdaq had never been higher before today. The Dow is climbing and the S&P 500 set yet another new record to close the session.

But how long will the highs hold up? When will this market take a fast turn to the downside?

Important questions for sure. But what may be even a more important question is, “Who will be wrong when the market turns, and how do I profit from that mistake?”

Seemingly a harsh thought, but keep in mind…

Retail traders — like the Simpler community — must remember that there is always someone on the other side of a trade trying to get our money.

One trader’s misstep when the market turns is another trader’s boosted bank account.

All traders lose money, so it’s important to know where most of the losses come from and avoid that part of trading.

As this market sets up for the next big twist or turn, learn to be the trader who isn’t chasing, but the one who knows that other people are chasing.

Learn not to be the one who trades too big for his or her account size, but the one who trades just the right size, or smaller, for his or her account size.

Learn not to be the one who frantically feels that he or she has to be in every move, but the one who’s content to wait patiently for the one setup that falls within his or her trading plan. Even if it means not having a trade that day.

See the common theme? Learn to be a better trader who can escape the losing cycle that often follows a big move in the market.

Over the long haul, a trader can plan for profitability by trading small and consistent versus trading large and haphazard.

Be the trader that wants to make money by being on the winning side of a market turn, not the one that misses what’s ahead before you know it.

We Saw: Record-setting day in the market —

  • Nasdaq highest day ever; S&P 500 hits another new high, Dow climbs
  • Essential retailers warning of further inflation
  • Big week of earnings reports continues with retail, tech focus

We’re Watching: Market influence from earnings reports, politics, pandemic —

  • Bitcoin breeches $50K again thanks to “whales”
  • Squeezes firing in key time frames, favorite tickers
  • Catching signals across charts showing big moves