Today is yet another painfully emotional day. While the market is up, that doesn't necessarily mean that everyone is happy! In my opinion, the way the market has been whipping around is indicative of a light, choppy market where the big money is sitting on the sidelines.
Whether we go up or down it seems to be driven by the same factor, which is fear. I find that in these choppy markets we have very little choice on how to trade them. Either you are a long-term investor in which case, this week, or next week's action may mean very little to you. But if you are slinging the markets day in and day out this has been a difficult time.
There is an old adage that I am sure everyone has heard, "The trend is your friend." But what if there is no trend. What if we have one day up, two days down, two days up, ect. You get the point. This can be a very trying time and one where emotions may get in the way of proper risk/reward management.
In my mind the best part about this business is that there is always tomorrow. Where else can you find moneymaking opportunities on a daily basis? Whether we capitalize on them or not is another story, but the opportunity exists. The thing is, you need capital to participate in this. So unless the charts line up, your risk/reward ratio is acceptable, or your catalyst is still in tact it may pay to stay away.
It may be a better trade not to trade. Wait for your trade. Wait for the set-up to take form and then strike. Set your stops and know your price targets. Be prepared because in a short-term trendless market such as this one, you may have to act quickly. You may have to take a quick trade and stick and move. Protecting your capital is as important as improving its value.
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