It sounds cliche, but when it comes to trading, I teach my students not to spit into the wind. Well, not literally. It’s just an expression. But, my students know what I mean. If you spit into the wind, you’re likely to get spit in your face. And, who wants spit in their face?
While I’m on a roll with the analogies, here’s another way to put it… The overall stock market is like the tide of the ocean. It’s much easier to go with the flow of that tide than to fight it. Fighting the tide is almost always a mistake. In fact, 90% of stocks will move in the direction of the overall market. Why fight those odds? The trick is to have an objective way to analyze the trends (tides) of the market.
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