During these trying times, it's hard for an uptrend or breakout trader to make gains. My paper trades on downtrends have been a mixture of hits and misses. Real trades on downtrends have been mostly misses.
So when I found an 'easy' trade, it was a simple decision to go all in.
This was during the first breakout. Sold it all at a good profit.
But lo and behold, there was magic happening everyday and it formed one of my favorite formations, a flag. So after setting my strategy to trend following, here it is right now.
How long before I sell? Who knows? I'm still waiting for the magic to run out. But the signals are getting better and better. The big bad bear is still in full force.
Good thing beer is in demand during bad times.
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Update 02.02.2016
Sold half yesterday and sold all at the open.
Given the current state of the market, it looks like it will be a tough 2016 for all. The recent breakdown of the support is a major red flag that everyone should be aware of.
Money can still be made, but it might not be as easy as in recent years. Buying the dip strategy might not work anymore since it could turn into catching falling knives, swords, axes etc.
Sometimes it is best to know when to stop first and look for alternative strategies. Turn off the breakout mindset and switch on the bounce play techniques.
Don't have a long term view.
Cut your losses to be able to fight another day.
Protect your capital.
For now, all upticks in price should be viewed as short term rallies or chances to get out or just quickie moves.
Hey, even the spartans knew that they were fighting a losing battle. Imagine yourselves as the 300 spartans. You have the better fighters but you are up against an army of millions.
When faced with such a formidable foe, they didn't face them head on but resorted to guerrilla tactics. They made the persian army fight them by their rules. Quick strikes.
In the end, even after all their efforts, they knew that they were just stalling. That they just had to hold their ground. Waiting for the reinforcements or for their army to come.
Now think of your capital as the spartans. The persian army as the ongoing selling force. Your capital can't make the selling force stop. It can't. But you can still have small wins here and there. All you have to do is to weather the storm. Hold the line, try not to lose too much capital. You're stalling until the reversal comes. When the bulls come back.
And that is the time to go all in.
Welcome 2016!
The first ever badge for the blog and it's an oatmeal badge!
Thank you NIKL. Failed bounce + sudden selldown = oatmeal for 1 week for me.
