Step 1: Greed or fear?
High prices induce greed to make more money or keep profits
Low prices induce fear of losing more money or miss the train
Step 2: Pick stock
Stocks make most gains after deep correction or consolidation
Stocks stronger than index are long targets, vice versa for short
Step 3: Buy stock
Buy on breakout consolidation or retracement to breakout level
First obvious breakout usually weak, avoid and wait second one
Step 4: Sell stock
Uptrends end with euphoria, consolidation or lower low
Never over commit, break support sell, hit bet amount cut
Updated 25th Dec:
Trading can be distilled down to the following mantra:
Market is a battle of mental strength, not method.
Avoid overly large positions. Sell on short signal.
Always note 2nd breakout and 2nd chance effect.
