Trading Fundamentals
As football fans, we like to listen to players discuss the routines they use to win. One player said he physically trains, eats right, gets plenty of sleep, but most importantly, he watches the opponent's game reels. By watching past reels, he is able to create a mental photo album of possible plays that could happen on game day. This preparation gives him confidence that he will be able to recognize and react, as the pictures in his head are playing out on the field. The same is true of stock trading. We cannot see the future, so we look to a stock's past behavior (chart patterns) to anticipate its potential future moves. There are only a few patterns/pictures that we look for as a signal to enter or exit a trade. Learning to recognize these patterns/pictures as they appear on the stock charts, is key to trading success.