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Keep your powder dry

Hey Market Pilots,

Sometimes it is ok to do nothing in the market. In fact, Jesse Livermore said it was the waiting which made him the money; Waiting for a setup to form and waiting for a position to appreciate. And markets aren’t always clear. There can be chop during consolidation which makes entering a position treacherous or just a waste of time. 

It can be challenging as a trader to be inactive, but it is a skill that must be learned. Overtrading is a real thing and we waste our time and energy getting distracted on lackluster setups that we then miss the big one that was setting up right in front of our eyes. 

Having a defined set of rules can help you cut down on overtrading because if your rules are good, then not too many stocks will fit at any given time. When multiple tickers do start to fit your parameters, then you need to determine which names are the best of the best. Picking names that are in the hot sector at the time will help this too.

There may be several names starting to shape up and look good, but only a few will really stand out and look appealing. I like to build a list, then narrow that list down as I evaluate each ticker against the other. Direct comparisons between tickers will help me see the nuances that make one better than the other. This back and forth observation is also how I learn and train my eyes for what to look for. It can really be as simple as that; just keep looking at all the various patterns and configurations. Eventually, your eyes and brain will start to see things that stand out.

Above all be patient, wait for the right time in the market, and be sure to keep your powder dry so that it’s ready to go when things suddenly ripen.

How do you train yourself to see such patterns? Leave me a comment below.

Over and Out,

Your Profit Pilot

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