"Do you know where your money is?"
and we return back to market conditions... i begin with this saying
"when that intended move does not develop and if the charts begin to change and the price begins to move thru the stop, then it is showing the "facts are changing". If the facts change then we must change with them"
and here, an afternoon tea reading...
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One of the most costly mistakes most, if not all, traders make is when a conclusion is formed that a particular stock or index just has to make a move in a specific direction. A position based on that conclusion and initially it starts to go well. But the situation changes and like that proverbial "deer in the headlights" the trader just stares in disbelief as the price goes the "wrong way".
I've constantly read that women make better traders because they can change their minds so quickly. And when it comes to trading, this is a good thing to be able to do!
I have learned some the hard way, that it just is not worth it to be inflexible and deny that the price is going against you. Yes, I know it is so easy to say "it is only just a little bit against me, perhaps it will come back and go my way." And there will be a few occasions when that hope will prevail and the position is "saved".
But I have seen so many occasions when that "little bit" that the price has gone against a position turns into "just a little more", and before too long all of those "little bits" become "a lot", and it winds up being a huge loss. Those few times that a position gets "saved" is just enough to keep hope alive, and it won't take long until this causes the person that won't set or honor stops to lose all of their money.
The markets are fluid and sometimes they will change very suddenly. Watching the price movements can help in showing that the conditions were changing, and that we needed to change our outlook and perspective to accommodate the changing conditions.
It is possible that yesterday's sudden move could fall apart and collapse, and if it does, then it would put us back into the potential for a downward move. But with the changes we have on the daily charts (and a few of the weekly charts) the prospects of that happening appear to be growing slim.
There is overhead resistance, and this upward move may not be the best, but at this time, we have a very significant change in the charts and the conditions are showing the potential for the price to move high. The downward move may not have worked out as we expected, but by following the indications of these charts we are in the early stages of this change in direction, and this puts us ahead of the majority of traders that will wind up chasing after the price after a good part of the move has already taken place.
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