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day trading trade expectation

Do you know what “should” happen next? If a stock or the market makes a new high what should happen next? It should at least retest that high if order flow (buying pressure) is still good.

Do you have a plan (trade scenario) in place for if a new high is made? Do you have a plan in place if the stock or market fails to make a new high? Do you short sell at this point or do you only continue to look for a long?

What do you have in your plan regarding leverage and trade expectation based on which of these scenarios unfold? Do you increase your position at new highs or do you remain with the shares you have?

If the market fails to make a new high and you short sell, do you realize before you place the trade it is a momentum trade and have NO REASON to expect a bigger move?

What does this mean? It means you should be comfortable with the fact (before you place the trade) that the odds of the trade being a small loss or small profit are high.

This is important because you will manage the trade accordingly. Instead of hoping for a bigger profit on the trade you will know how much you can reasonably expect before the trade is initiated.

We teach all of this in our twenty day workshop KEYSTONE 20.  The next workshop begins April 1st.


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