How to Atone for This Cardinal Trading Sin

[Money Trends with Andy Krieger]( Welcome to Money Trends! If this is your first time reading one of our issues, learn more about us [here](. And if you have any questions or comments, shoot us a note anytime [here]( or at feedback@andykriegertrading.com. How to Atone for This Cardinal Trading Sin By Imre Gams, Editor, Money Trends Volatility is a trader’s lifeblood. Because when volatility is high, traders can make bigger profits on dramatic swings in asset prices. Conversely, low-volatility environments are the bane of active traders. While there are strategies that work in low-volatility markets, it’s not a reliable approach. Despite this, many traders get the itch to trade even when the market isn’t moving. And this is the kind of behavior that gets them into trouble… It’s one of the deadliest sins committed by both professional and amateur traders around the world: over-trading. I’ve seen traders blow up countless accounts by trading the market when they had no business doing so. Whether it’s taking an outsized bet after enduring a bad losing streak to try and make it all back in one shot… Or bleeding out by taking a bunch of small losses while the market goes nowhere… This deadly sin has proven time and again that nobody is immune from over-trading their account. If this sounds familiar, I have good news. There’s a specific trading method that prevents you from trading in low-volatility environments… And once you grasp it, it will ensure that you’ll only enter trades that are firmly in your favor. The Best Strategy? Have a Strategy Now, before we get to this method, I want to put you in the right frame of mind. The best trading approach, of course, is to have a thorough and proven methodology that tells you exactly when you should be trading. Too many traders rely solely on their gut or intuition when it comes to trading. This method is almost never successful over the long run. My best advice is to write down your trading plan and review it on a regular basis. Your trading plan should include exactly what it will take for you to enter and exit a trade, your risk management strategy, the hours of the day you’ll trade, and how you’ll handle winning and losing streaks. My own trading plan, for example, is built around Elliott Wave Theory, also known as the Wave Principle. We’ve discussed this principle in Money Trends recently [here]( and [here](. One of the biggest strengths of the Wave Principle is its ability to identify the bigger-picture trend. Simply put, if you can properly count a five-wave sequence either up or down, then you have identified the trend using the Wave Principle. The next sequence will be a counter-trend movement that will ultimately subdivide into three waves. These trending sequences are called motive or “impulse” waves. The counter-trend sequences are called corrective waves. Even if you don’t learn the specific Elliott Wave corrective patterns, simply being able to identify motive versus corrective waves is a powerful ability to have. You don’t want to make trades if a market is already in motive mode. Instead, you should make trades as a corrective structure is terminating and the next trending sequence is ready to begin. Having the discipline to adhere to this rule allows you to avoid picking market tops and bottoms while ensuring you’re only participating in a trending market. Because markets only tend to trend roughly 30% of the time, this means you’re sitting on my hands more often than not. And that’s okay. Being in cash is oftentimes the best trading position you can have. But it’s important to identify when a trend is taking shape, too. That’s the difference between a sideways market… and a huge, imminent move. A Tool for Identifying Tradable Trends For example… in my last Money Trends article, I discussed [the triangle pattern]( and how it should be an integral part of every trader’s toolkit. Sometimes these triangles take shape over weeks, months, or even years. When this is the case, we know that something big is right around the corner. For example, Andy and I used the triangle pattern to anticipate the extreme market volatility in early 2020. Not every trade, however, has to be a home run. You can make a lot of money, reliably, batting singles and doubles, too. And today, I’ve identified a triangle in Goldman Sachs (GS) that fits that mold. Take a look… This triangle began taking shape on June 5th, and at writing is still incomplete. This is what I mean about being patient and avoiding the market when it is not in a trending phase. From my last article, we know to wait for a breakout above the (d) point at 216.91 before this triangle confirms it is complete. Aggressive traders will try and position themselves in advance of the breakout, by trying to anticipate the end of wave (e). This will, of course, give them the potential for greater profits on the trade. Such a strategy, however, also carries greater risk. My preference is to take a more conservative approach. Therefore, I will be on high alert for a break of the (d) point of the triangle. Of course, if prices never break above the (d) point of the triangle, then the pattern is never confirmed and we don’t have a trade. You see, I like to think of trading as a relationship. I want the market to commit itself to me before I commit to the market. So, if Goldman Sachs can break above 216.91, this will be a sign of the market committing itself to the resolution of this triangle pattern. Finally, the minimum projected target I have here is a move towards 240. I was able to derive this target by measuring the width of the triangle by extending the trendlines to the left from the extreme of points (a) and (b). I then took this measurement and applied it to the base of what I believe to be the beginning of wave (e). This would be a move of almost 11% in the stock from the breakout of the (d) point of the triangle. As you can see, the triangle pattern is an invaluable tool to identify trades in what appears to be a non-trending market. If you make good use of this tool, you’ll know when to hold off on trading… and when to position yourself for a big move right around the corner. Regards, Imre Gams Editor, Money Trends --------------------------------------------------------------- Like what you’re reading? Send your thoughts to feedback@andykriegertrading.com. [Money Trends with Andy Krieger]( Andy Krieger Trading 55 NE 5th Avenue, Delray Beach, FL 33483 [www.andykriegertrading.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This email was sent to {EMAIL} because you subscribed to this service. If you no longer wish to receive emails from Money Trends with Andy Krieger, [click here](. Andy Krieger Trading welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-888-206-3481, Mon–Fri, 9am–5pm ET, or email us [here](mailto:feedback@andykriegertrading.com). © 2020 Omnia Research, LLC. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Omnia Research, LLC. [Privacy Policy]( | [Terms of Use](