How To Choose The Best Chart Patterns
Today I want to discuss a few different chart patterns that beginners should focus on when they first start out day trading. Many traders start out with what I call indicator fascination and delve into advanced analysis methods that can confuse them and often times discourage them from continuing trading. When I started out trading I was under the impression that the more difficult trading methods would produce bigger winners or higher probability of winning trades.
Fortunately, I met a few professional traders who mentored me and showed me some simple strategies that got me on the right track and more importantly made me understand that profitable trading is not about complex and confusing trading patterns or strategies but about finding simple methods that matched my emotional make up and my risk tolerance.
One of the most profitable ways to trade is to spot a short squeeze in a stock, commodity, or index. They happen somewhat often in individual names, less often in commodities, and rarely in an index.
When I was a kid, my father used to always tell us to keep the screen door closed. We lived in a rural area and it seemed that all the flies would congregate at our house. Whenever someone opened the door, the flies would enter.
Trade identification, or knowing which instrument to trade, can be daunting if you don’t have a simple way to know the true direction of the market.
In my youth, I used to love reading books and watching movies about pirates and buried treasure. Sooner or later, someone would discover the treasure map, leading to a wild adventure to find the buried treasure chest.
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