The Weak Hands Don’t Change, But We Can

The Entry Points

This is not meant as a slight against anyone involved in trading their own accounts. Trading is a very tough occupation/endeavor. We face constant battles – mainly with ourselves. But when we allow emotions to get involved with our trading decisions, then we are assured of being one of the weak hands. Because the weak hands never approach markets in a calm, professional manner. They are constantly flailing about, never relying on their own work exclusively. They are always asking others for their take on markets and always going to websites and blogs and the media for the “news” which somehow will give them wisdom. They are always getting bullish right into the top and bearish right into the bottom, because of the “price action” and the “breakouts” and the “trendlines”. They are always getting bearish/time to sell when the “support is broken” or the moving averages are pointing straight down, and they are always getting bullish/time to buy when the “resistance is broken” or the MAs are pointing straight up.

So when we approach markets this way, then we make ourselves prey to the multitude of scam artists also involved in markets. But these scam artists long ago figured out they are too dense or lazy or incompetent to ever make money in markets. And they have also figured out how to suck the money out of the throng of weak hands out there. The great thing is that all of this is “easily” fixed, it’s just up to all of us to do the hard work required to be able to fix all of this.

Another big problem we all face is having a bias in markets – being a permabear or a permabull is a killer. And “extrapolation-bias” is a big part of that. For instance, the shippers like DRYS, TOPS, or DCIX, have been demolished over the last several years, so people believe and become “comfortable” or accustomed to the falling prices. But something changed recently, and two weeks ago we started talking about the “change in character” in DRYS when it “finally closed above an important resistance area”. And we started trading them and have done videos, posts and posts about them.

Another market full of bias and emotion is the PMs, and we have been adamant since December 2015 that gold is in a huge accumulation area. But we have viewed them all year as just being in a trading range, thus have gotten in and gotten out, long and short, and talked about this several times the last few months, recently here. This trading range will certainly not last forever. But the most important take away is that it has been our work we have relied on.

Markets are never easy, and we all blow it at times. Even the strong hands screw up. But having a truly calm, professional attitude will help us open our eyes up to the amazing opportunities in markets, and it will help us to view markets much differently – like the strong hands’ approach to markets. Because the strong hands view markets in a calm, professional manner, and they Don’t Change: