In this week’s lesson, what I’d like to focus on is delayed gratification in stocks. Holding back your instant gratification urge when trading.
I find that a lot of traders and a lot of people that get into the market have a real problem when it comes to their inner game. And if you haven’t heard me talk about the inner game and the outer game of trading, just keep in mind that the inner game of trading has to do with things that are internal to you, your psychology, your mentality, your focus, your discipline.
Whereas the outer game of trading has to do with the physical aspects of trading, such as learning technical analysis, learning the tools of your trading platform and all those other things that are external to you.
A lot of traders, from what I see, have a major issue with instant gratification, or some people like to call this the shiny object syndrome. That’s the topic of discussion for this week.
News about the market
Before we get in detail into this topic and lesson, I do want to run by the S&P 500, the news, the reaction and what’s going on and what’s happening in the markets currently.
Looking at the S&P 500, I’ve talked about this dozens of times, but I do want to give you an update to make sure we’re all in sync of what’s going on and what’s happening in the market.
If you take a look at the support line and region that we drew across here, across this line, you can see that is a major critical support line, and then we have our resistance line right here, right around that 2135 level.
Things right now are a little bit unclear, as to what’s going to happen and when things are a little bit unclear, then things become a little more volatile.
This is in part due to interest rates, due to Janet Yellen, due to in part the economy of the world as well, so the Pies for the last year have been right around this region.
You can see if we take things back and bring it back to January of 2015, stocks have not broken higher past this 2135 level, and that’s going to be some major overhead resistance.
If we break that level, then we could see higher prices, and I would say don’t get in at 2135, you might want to wait until 2144 or 2143, just to give it a little bit of cushion, because you’re looking for multiple points to the upside.
For example, if we were to expand our chart a little bit, you’re probably looking for let’s say another 100 point run. So why chase or why try to get into that stock with just one dollar or one point additional move?
Because what’s going to happen is you’ll notice here what happened on Friday, November 13th, 2015, or November 16th of 2015 on Monday is that the stocks broke this 2040 price level and we went down about a couple of extra points. We went down about an extra 10, 13 points, and then the stocks bounced, similar to what happened yesterday, or the previous day on December 9th, 2015.
#tradingstocks #instantgratification #shinyobjects #tradingmarket #stockmarket #tradingproblems
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