If you don’t want to get tricked again, you need to play close attention.
Fool me once, shame on you. Fool me twice, shame on me. This market has been throwing out signs of a potential major trend shift all year long. Now we are looking at yet another potential juke that could be come a costly mistake. Take a look at why you need to be white knuckle gripping the wheel right now.
So I simply can’t avoid using Who song titles to explain this. I was trying but the old man in me prevailed.
If you want to make sure you “”Don’t Get Fooled Again” you have to figure out “Who Are You?”.
When you look at the chart the black line is the trend. Period. The red gashes are all bounces along this brutal fall the market has been taking. Each one had the characteristics of a new bottom, but alas, it was just the market tossing traders like us around like rag dolls.
If you are very confident in your strategy, you can time these bounces and grab some gains with each one. That is impressive and holds a very thin margin for error. It is more likely that you can get whipsawed around and end up bleeding capital as your head bounces off each step of this steep staircase the market is tumbling down.
If you are more conservative, it still isn’t easy, but grabbing profit by leveraging the downward momentum is doable. (here is our article on bear strategies) The hardest part of this approach is stomaching the upward swings of this wild fall.
No matter which way you choose, knowing where the momentum truly is, either long term or short term, is the key to success. Joe Duffy has some of the best momentum setups in his free guide that you can get here. Now is a great time to grab it and brush up on the most important tip for your approach to this market.
Keep learning and trade wisely,
Market Wealth Daily
PS-If you missed yesterday’s article, it spotted an option trade that jumped over 50% within the day and may have more room to run. check it out here.