Importance of Pattern Recognition

One of the most important things you will ever learn in your journey of becoming a profitable stock trader is recognizing good patterns.

Being able to recognize good patterns is essential to getting the math in your favor. It’s the foundation of how we approach a trade.
What is it that is so important about a pattern? 
  • The dictionary defines a pattern as something that is repeatable. When you see a clear pattern, you can see what it has done and predict what it could do in the future, if the pattern continues.
  • A good pattern will suggest to us a good spot to enter the stock, and a good spot to exit the stock.
Utilize this simple but powerful tool, and it can completely change your ability to be profitable in the stock market.

Reach Your Goals By Getting Better At Trading Smaller

Get better at trading smaller and build up your confidence, so that you get momentum moving forward.

Start with trying really hard to make $100 on a trade, because if you can make 100 with one contract, if you do the exact same thing with 10 contracts, you would make $1,000. If you did the exact same thing with 100 contracts, you would make the $10,000 you desire.
If you aren’t in a position to make $100 with one. then what makes you think you’re ready to make $10,000 with 100?
What you will find is that if you consistently make money, month after month, with a few contracts, you will naturally be inclined to trade with more. You are building positive momentum. This is the way to reach your goals. Get better at trading smaller.

I Had To Redefine Success As A Stock Trader

How often do you approach a trade with a “win or lose” mentality? What does it do to your psyche? You’re setting yourself up for an emotional struggle that will affect your productivity. It may even cause temptation to break your own trading rules.

You must change the definition of success.
Usually a trader will define success as “making money”.
A good trade is one that you do according to your system.
Did you stop out? That was a good trade.
Did you take your profits when you were supposed to? That was a good trade.
When you begin to think this way, you have a way of making a trade a good trade every time, even if it doesn’t do what you want it to. Even if every trade isn’t profitable, there’s something in your head that will flip when you do this.
When you stop thinking about a trade going against you as a “loss” and you start to look at the fact that you’ve traded your system as a good trade, something in your psyche will flip.
You have to change the way you think about a stop out. If you can’t stop out, you won’t be a trader for very long. Change your mind.
Ben Russell