Spooked Into Good Trading Habits

Around this time of year, traders are beginning to feel the pressure of making up losses that were incurred throughout 2023.  Traders enter opportunities that don’t fit into their trade plan.  It’s total mayhem.  When novice traders are frazzled this causes a decent trade plan to go way off track.  A track that a trader would never ever want to go through.  Its almost like a haunted house of trades.  We will take a closer look at what a house of this sort looks like.

Bad habits have no place in a solid trading plan, however they do have a place in a haunted house of trading.  We know we are into the season of “Trick or Treat”.  Of course, traders would like to have a nice trade for a treat.  We would not like a trick from our institutions that we are not prepared for.  Traders may conquer this action by being prepared on what to look for.  This means that we need a routine that will keep us discipline and not focus on the market dynamics.  We have provided a list of bad habits that may be located in the haunted house.

Some traders fall back to using indicators due to a couple of consecutive losses.  Novice traders and seasoned traders are making this common mistake all the time not just around Halloween season.  If we are able to learn by this mistake, we would at minimum stop from buying into a supply zone.  This is also a novice strategy called buying the breakout.

The habit of chasing may come into play as traders that are having a difficult month may feel the need to trade with the momentum.  This chart below of AAPL is perfect example.  Novices always making the mistake of selling at the end of a downtrend into a demand zone.  If we can observe a chart and identify where the novice traders are located, there can be some assurance that we don’t want to be associated with their mistake.

Traders may use a trading plan combined with News that creates a reason for entry.  Colgate Palmolive has great earnings.  It made price rally into a supply zone.  When novice traders see great earnings, the mistake is just to hit the buy button.  The outcome is a trick that institutions have planned at their supply zone that they formed.

We are entering into the end of the year and should practice discipline.  The start of 2024 is on the horizon.  As traders we must always remember the sun will always rise the next day.  Traders need to keep it simple in any type of market.  We should have a mentality like this is just business as usual.  However, we must always remember that every year there’s that time where we need to be spooked back into good trading habits.trading habits


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