Thursday, May 07, 2009

Momentum and high probability charts

The following two posts demostrate why the combination of momentum and high probability charts are a preferred way to trade. Knowing from past experience that charts like this have a better chance of a profitable trade than something that is jammed up or choppy, it's easy just to follow your trading plan. Make an entry , set a stop and let the market momentum take over until it exhausts itself. 
The key is truly believing in the probability.  I never think I know what it will do. I acknowledge what it is more likely to do and trade it that way. I always protect myself from the unknown forces afoot in the market by deciding on where my buy or short decision will be proven wrong though. Many times a perfect "A trade" set up will fail just as easily as an ugly dog set up.

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