Mar. 8 at 4:21 PM
$META $GOOGL $TSLA $PLTR $ORCL
IMPORTANT REMINDERS:
It is always important to remember not to fight the overall market trend.
Unlike following the tariff pause last year, the market is currently not ripping higher.
What does that mean?
It means breakouts are not working the same as they were in a clear upwards trend.
Also, there are plenty of head-fakes with stocks that can cause you losses if you are chasing momentum.
For example, take a look at VIAV recently (chart attached).
On March 2nd, VIAV launched 19% higher on 370% of normal volume.
In a roaring bull market that would have probably signaled strength and a possible move even higher.
However, subsequent to that move, in this market VIAV has given back of of those gains and then some over the next four trading sessions.
So....how do you play a choppy market like this one where geopolitical events can change the market direction day to day?
There are a few things you need to remember:
1) Never fight the overall direction of the market. The overall direction of the market is the single, most powerful force in trading.
2) You need to learn to sit out the times when you have no clear read on what the market is doing.
3) Remember that being in cash and not trading IS a position. In fact, sometimes it is the best position you can take.
4) Your #1 objective is ALWAYS the preservation of capital. You need to wait for clarity and act only when the evidence is undeniable.
5) Remember that large drawdowns are the single biggest reason retail traders leave the industry. Never risk your capital until you have clear evidence that the overall market is conducive to your edge working.
As always, please feel free to do whatever you want.
I am simply sharing what I have learned from studying the 5% of elite traders who consistently make money in the market.
Warmly,
DC77
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