I am about to rant.
So the title of the post is “In a market that rises, the price increases.” You probably think that is the most obvious statement of all time. I agree.
Let’s look at another sentence. “When X happens, the price increases.”
Let’s construct a sentence that is more “believable” , “When X happens, 99/100 times, the price increases by 3% over the next 2 weeks.”
OK, as a trader/investor which sentence is most helpful?
The fact that the price is increasing is the only thing that matters. If price is rising anyways why does anything else matter?
When I hear people talk like this, it is like talking to the crazed sports fan who thinks that because he came back late from the bathroom that his team lost.
Let me be clear, changes in market structure, character, participation are all important things to take note of. Is it more important that the market is going up or that something happened?
I am not saying that type of information is worthless but it is only a sliver of what it is needed to make a more informed trade. Now some will argue that my sentence is useless “In a market that rises, the price increases.” You know how long it took me to figure out that the trend is up? Not very long. Time management is just as important as risk management. With a few minutes of looking at charts I can decide how to use that information. I can see where it has been and make some determination of where it can end.
Trading is local. Probability is a shortcut for risk management and having market awareness. She is cruel and only reveals part of her story to you.
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