Market Wizard Linda Raschke’s Technical Trading Rules
Buy the first pullback after a new high. Sell the first rally after a new low.
Afternoon strength or weakness should have follow through the next day.
The best trading reversals occur in the morning, not the afternoon.
The larger the market gaps, the greater the odds of continuation and a trend.
The way the market trades around the previous day’s high or low is a good indicator of the market’s technical strength or weakness.
The previous day’s high and low are two very important “pivot” points, for this was the definitive point where buyers or sellers came in the day before. Look for the market to either test and reverse off these points, or push through and show signs of continuation.
The last hour often tells the truth about how strong a trend truly is. “Smart” money shows their hand in the last hour, continuing to mark positions in their favor. As long as a market is having consecutive strong closes, look for up-trend to continue. The up trend is most likely to end when there is a morning rally first, followed by a weak close.
High volume on the close implies continuation the next morning in the direction of the last half-hour. In a strongly trending market, look for resumption of the trend in the last hour.
The first hour’s range establishes the framework for the rest of the trading day.
A greater percentage of the day’s range occurs in the first hour then was the case in the past, and thus it has become increasingly important to trade aggressively if there are early signs of a strong trend for the day.
There are four basic principles of price behavior which have held up over time. Confidence that a type of price action is a true principle is what allows a trader to develop a systematic approach. The following four principles can be modeled and quantified and hold true for all time frames, all markets. The majority of patterns or systems that have a demonstrable edge are based on one of these four enduring principles of price behavior. Charles Dow was one of the first to touch on them in his writings.Principle One: A Trend Has a Higher Probability of Continuation than Reversal Principle Two: Momentum Precedes Price Principle Three: Trends End in a Climax Principle Four: The Market Alternates between Range Expansion and Range Contraction!
In the world of money, which is a world shaped by human behavior, nobody has the foggiest notion of what will happen in the future. Mark that word – Nobody! Thus the successful trader does not base moves on what supposedly will happen but reacts instead to what does happen.
One place that stars out 100% equal opportunity are the markets.
The stock, currency, future, option, and commodity markets do not care about your race or gender. It does not ask you to feel out a resume to see if you are qualified or educated enough to make money trading. It is one of the few professions where you can enter and play along with the professionals with no prior schooling or experience needed.
You can not go walk on to Cricket ground and hit a sixer in a game or go try your hand at surgery on a whim because you think it is something you would like to learn how to do. In the markets you can take the other side of a trade with Paul Tudor Jones or sell a stock to William J, O’Neil even if you never know they were on the other side. Trading is a profession where you can place a trade and have a 50/50 chance of being right even if you have no idea what you are doing. You have the equal opportunity to make or lose money regardless of race, religious creed, or gender. Well at least you do at first.
However, even though in the short term markets are equal opportunity, in the long term the markets start to discriminate against those with no patience, they enter bad trades, and those that do not manage risk, the markets take much more from them when they lose than those who do manage their risk. The markets systematically take money from traders that trade a system or method that does not work. The markets over the long term discriminate between those that can trade and those who can’t. Good traders are on the winning side more and bad traders are on the losing side more. Good traders manage risk, trade a robust system, and have confidence in what they are doing. Bad traders are gamblers, making big bets, trading on emotions instead of systems, and are not consistent in their method.
Even with the easy entry into the markets new traders must respect the profession, they must study. To be successful new traders must put in the time with charts, books, questions, trading, and perseverance. Even though it is easy to jump in and trade it is not as easy to pull money out and keep it. You will only get out of trading what you put into it.
Expected win versus loss percentage. Your winning percentage performance is the first step to profitability.
Average win size. The higher your winning percentage, the smaller your wins can be. The smaller your winning percentage, the bigger you wins must be to make you profitable.
Risk versus reward ratio. Risking little for a high probability chance to make a lot should be your focus.
Historical performance of entry signals. You must have an understanding of how your entry signals did in your time frame in the past.
Exiting trades to maximize gains. The use of trailing stops and overbought/oversold oscillators for targets help with maximizing profits.
Proper position sizing. This keeps losses from being over 1% of total trading capital. Not having big losses is a big step to profitability.
Limiting total risk exposure at any one time to 3% of total trading capital. Eliminating big drawdowns and the risk of ruin is the first thing a trader must do.
The frequency of your trade entries is important. Will there be enough trades to make your system work when you really start trading? Will there be too many signals that lead to lowering your win rate, or over trading and excessive commissions?
Consider market volume. Does the volume in the markets you want to trade keep the bid/ask spreads tight to avoid large slippage? This is especially true for option markets, over-the-counter markets, or for trading systems that are not scalable.
Hope for the best, but plan for the worst. What are your expectations for maximum drawdowns in your trading capital? Can you handle it emotionally and mentally?
It’s easy for investors to get caught up in what they think is right or should happen. But that’s not how traders become successful.
We all have ego. Everyone likes to be right, likes to be seen as intelligent, and likes to be a winner. We all hate to lose, and we hate to be wrong; traders, as a group, tend to be more competitive than the average person. These personality traits are part of what allows a trader to face the market every day—a person without exceptional self-confidence would not be able to operate in the market environment.
Like so many things, ego is both a strength and a weakness for traders. When it goes awry, things go badly wrong. Excessive ego can lead traders to the point where they are fighting the market, or where they hold a position at a significant loss because they are convinced the market is wrong. It is not possible to make consistent money fighting the market, so ego must be subjugated to the realities of the marketplace.
One of the big problems is that, for many traders, the need to be right is at least as strong as the drive to make money—many traders find that the pain of being wrong is greater than the pain of losing money. You often have minutes or seconds to evaluate a market and make a snap decision. You know you are making a decision without all the important information, so it would be logical if it were easy to let go of that decision once it was made.
So often, this is not the case because we become invested in the outcome once risk is involved. Avoiding emotional attachment to trading decisions is a key skill of competent trading, and being able to immediately and unemotionally exit a losing trade is a hallmark of a master trader. Being wrong is an inescapable part of trading, and, until you reconcile this fact with your innate need to be right, your success will be limited.
Who has not seen the beach girl who is throwing back her wet hair, corn flowers or shells that all have the perfect Fibonacci spiral assigned to it? People then try to tell you that Fibonaccis are a ‘natural’ occurrence and that their presence signals something special. The truth is, for every Fibonacci spiral that you randomly find somewhere, there will be tens of thousands of things where a Fibonacci sequence cannot be seen.
And especially, when it comes to trading, Fibonaccis are not a superior way of predicting and analyzing price behavior, but it is more like a self-fulfilling prophecy when you see it ‘work’. When you can use it in combination with other concepts, you will be able to benefit from it and no doubt, Fibonaccis can be a great addition to your trading arsenal as you will see shortly.
No right or wrong
Often, traders who have no prior experience with Fibonaccis are worried that they are ‘doing it wrong’ and don’t use the Fibonacci tool correctly. I can assure you, there is no right or wrong and you will also see that many traders use Fibonaccis in a slightly different way. When it comes to using Fibonaccis, there are only a handful of things you have to be aware of. But after playing around with Fibonaccis for a short while, you will become comfortable very quickly.
Step 1 – Find an ‘A to B’ move
To use the Fibonacci retracements, you have to identify an ‘A to B’ move where you can use the Fibonacci retracement tool. What do we mean with ‘A to B’?
A = the origin of a new price move. These are usually swing highs and lows, or tops and bottoms.
B = Where the move pauses and reverses.
The following 4 screenshots show typical A to B moves
Now let’s apply the Fibonacci retracement tool to the A to B moves. Just pick the Fibonacci tool from your platform, select point ‘A’, drag it to ‘B’ and release it.
Connecting A to B moves with the Fibonacci retracement tool
Step 2 – Find the retracement point C
After you have identified an A to B move and plotted your Fibonacci tool on your charts, you should be able to find point C.
C = the point where the retracement ends and price reverses into the original direction.
As you can see, the first 3 screenshots show the typical ABC move of a Fibonacci retracement. Point C is very obvious on all three charts and price bounced off the Fibonacci levels accurately.
Finding the C-Fibonacci retracement level
click to enlarge
click to enlarge
click to enlarge
click to enlarge
The fourth screenshot shows a scenario where price did not go back to the B-Fibonacci level, but breaks the prior A-Fibonacci. It’s important to understand that not all price moves will stop at a Fibonacci level. But, as you can see on the fourth screenshot, the Fibonacci tool can be used to identify support and resistance areas as well as we will explore in more detail shortly; the last screenshot shows nicely how price reacts to several different Fibonacci levels during the retracement.
Tip #1: Trial and error
Especially for beginners, the following exercise will help you build a strong foundation when it comes to drawing Fibonacci levels: Just grab the Fibonacci retracement tool and try to put it on different spots, while observing how price reacts to it. Usually, the more ‘snaps’ (price bouncing off a level) you see, the more important the Fibonacci retracement is.
Tip #2: Don’t force a Fibonacci
Not every time you’ll be able to use a Fibonacci retracement to make sense of a price move. If you can’t make the Fibonacci levels snap, don’t try to force it. The best and most helpful Fibonacci retracements are those where you don’t have to look long.
Using Fibonacci
#1 Retracements as re-entries
The most common use for Fibonacci levels is the regular retracement strategy. After identifying the ‘A to B’ move, you pay attention to the retracement level C.
The screenshots below show a sudden bullish move in a larger uptrend. Often, traders miss such sudden outbursts and then try to find re-entries during pullbacks. The Fibonacci tool is ideal to identify swing-points during pullbacks as the sequence indicates. With the Fibonacci retracement tool, a trader would have been able to find 2 Fibonacci re-entries on the pullbacks.
Using Fibonacci retracements as re-entries in a trade – click to enlarge
#2 Support and resistance
Another possibility to use Fibonaccis is to find an AB-Fibonacci move on a higher timeframe and then go down to your regular timeframe and watch the retracement levels as support and resistance guidelines.
The first screenshot below shows the Daily timeframe of the current EUR/USD chart. As you can see, there was a regular ‘A to B’ move. The screenshot in the bottom shows the same Fibonacci retracement but on the lower, 4 hour timeframe. As you can see, throughout the whole time, price reacted fairly accurately to the Fibonacci levels.
Daily timeframe with an ‘A to B’ Fibonacci move – click to enlarge
Fibonacci levels acting as support and resistance on a lower timeframe – click to enlarge
#3 Fibonacci levels for Take Profits – Fibonacci Extensions
Finally, you can also use Fibonaccis for your take profit orders. Especially the Fibonacci extensions are ideal to determine take profit levels in a trend. The most commonly used Fibonacci extension levels are 138.2 and 161.8.
Most trading platforms allow you to add custom levels. Usually, the parameters to add the Fibonacci extensions are:
-0.618 for the 161.8 Fibonacci extension
-0.382 for the 138.2 Fibonacci extension
The rules for take profit orders are very individual, but most traders use it as follows:
A 50, 61.8 or 78.6 retracement will often go to the 161 Fibonacci extension after breaking through the 0%-level. A 38.2 retracement will often come to a halt at the 138 Fibonacci extension. The screenshots below show the Fibonacci moves from the beginning and this time we applied the extensions to the price moves. As you can see, the extensions provided great places for take profit orders.
A 78.6 retracement goes to the 161 Fibonacci extension – click to enlarge
A 50 retracement goes to the 168 Fibonacci retracement – click to enlarge
click to enlarge
Conclusion: Fibonaccis are multifunctional
The article demonstrated how to use Fibonaccis efficiently in your trading. However, don’t make the mistake of idealizing FIbonaccis and believing that they are superior over other tools and methods. Nevertheless, Fibonacci is a great tool to have and can be used very effectively as another confirmation method. Whether you are a trend following or a support and resistance trader, or just looking for ideas how to place your take profit orders, Fibonaccis are a great addition to your arsenal.
Do you have a quantified trading system of entries and exits? Have you found a way to capture trends in your time frame by studying historical price action?
Have you back-tested your system adequately? Do you know what the possible odds are for your trade setups based on historical price data?
Do you have a strong support system in place? Do you have friends and family that support your desire to be a trader?
Do you have enough trading capital? Serious active traders should have adequate capital. Low capital will have trouble overcoming commissions, and even the bid/ask spread in lower volume markets.
Do you have a written trading plan? You should create a written plan when the market is closed so you know what actions you will take when the market is open.
Do you fully understand proper risk management? It is imperative that you understand the mathematical risk of ruin before you start trading. Never losing more than 1% of your trading capital on any one trade, is a great place to start.
Have you decided what position size you are emotionally comfortable trading? You must trade with a position size small enough that you can follow your trading plan. A position size too large can distract you and make you veer from your plan.
Do you have realistic expectations about returns? The greatest traders in the world return 15% -25% a year. Trying to get rich quick is the fastest way to go broke.
Do you have enough faith in your methodology to trade it through draw-downs? You have to know the consecutive losses to expect from your trading system, and accept it when it happens.
Do you have faith in your abilities to trade like it is a business? You have to trade like you are a casino, knowing the odds are in your favor long term, and not like a gambler who disregards the odds that are against you.
What is your plan for happiness? Follow these steps and realize joy in your lifetime.
Don’t do things half-way. Only do things that you are passionate about. If you can’t do something with all of your heart, then continue to look for your true calling. Then do it to the best of your ability.
Know where you are going. If you don’t know where you are going, your decisions and destinations will be a random result of your environment. Goals take time, perseverance, and effort. Most people never accomplish anything because they quit too early, don’t work hard enough, and don’t finish.
Don’t get lost. The path to happiness and success will be treacherous and foreboding at times. Don’t go down the wrong path for too long. Remain agile enough to change direction quickly.
Don’t allow losers into your life. You must conserve your energy for your passions. You have a limited amount of time and energy to invest in the things you want in life. Invest your energies into the people and the projects that share and/or understand your passions.
Choose who you spend your time with carefully. You are the average of the people you spend the most time with, and you will become like them. They will influence you for good or bad. Accept the right people into your life, and both of your lives will be the richer for it.
Visualize your happiness. Every night when you go to bed, imagine how you want your life to be in the future. Experience it, believe it, lock on to that as your goal. Then focus on becoming the person that can live the life of your dreams.
Happiness is found in accomplishment. Living the life you choose is satisfying, and you will be happier while exploring your life journey, rather than working a job. Waking up each morning with the freedom to spend your time and energy the way you chose is the embodiment of success and happiness.
Did you know that a trade with a 90% winrate has the same likelihood of failing as a trade with a winrate of 20%? No, we are not crazy, but we are about to explain one of the most important trading concepts that the majority of traders get totally wrong and it’s also one of the reasons why the big losses happen when traders think that a trade is a good trade.
There Are No Such Thing As Good Trades
Once you understand this concept, you are one step closer to becoming a consistent profitable trader. Whenever you hear traders talk about setups and trades, they will use the words ‘good’, ‘mediocre’ or ‘bad’ to describe the quality of a trade. What will happen in a trader’s head when he assigns these attributes to a single trade is that he starts believing that a good trade should not fail that easily. This is a very dangerous standpoint to make trading decisions from.
Although different types of setups have different overall winrates, the quality of a single trade does not give any indication whether a trade will be a winner or a loser. If you are doing it correctly and religiously stick to your trading rules, all your trades should look identically and there is no way that you, or anyone else, could tell whether a trade is going to be a winner or a loser before price reaches either your take profit or your stop loss. Anyway, if you’d known that a trade would be a loser before, why in the world would your winrate anything but 100%?
Do You Understand Winrate Correctly?
You have to accept the fact that trading means failing. Only if you fully understand that all trades have the same chance of failing, you can become a profitable trader. It’s very important to note that the concept of failing doesn’t talk about the winrate of your overall trading performance.
A winrate tells you how many losing and winning trades you have over the long term and it enables traders to make decisions about risk and money management. The likelihood that a trade will fail is a concept that focuses on the outcome of a single trade. So although a winrate of, for example, 70% means that over the long term for every 100 trades you take, 70 will be winning trades, it has absolutely no value if you talk about the potential outcome of the current trade that you are about to take. You will never know which 30 trades are going to be your losing ones.
Your winrate tells you the long term ratio between winning and losing trades. Over the short term, a winrate has no value if you talk about the outcome of single trades.
The Difference Between New And Experienced Traders
A major difference between new and experienced traders is the way they handle being in a losing trade. Whereas new traders get their egos in the way of making educated trading decisions and believe that picking losing trades is their fault, the consistently profitable trader does not care about the outcome of a single trade. In the following part we explore how different traders deal differently with their expectations about trades and why the belief about the existence of ‘good’ trades costs new traders a lot of money.
New Trader: A losing trade means that it was my mistake
New and inexperienced traders think trading is an ego-thing. Everywhere on the web and on social media, traders seem to be chest-pounding alpha males that make a killing by being smarter than the markets. This gives the impression to new traders that if they have a losing trade, they are not good enough for this and that picking a losing trade is their own mistake.
New traders are prone to trade management approaches that include the widening of stop loss orders to delay the realization of a loss, adding to losing positions in order to achieve a lower overall entry price (averaging down) with the hope of getting out of the trade for break even faster and exiting trades when the price of a losing position comes back their entry price again. If you find yourself doing one of these things, you are trading based on emotions such as fear and greed and not on sound trade management approaches.
Half-Rookie: The best setups should not fail
A trader who has some experience trading the markets will know that trades can fail, but he hasn’t fully accepted the fact that even the ‘best’ setups will fail. At this stage, traders think that if they have patiently waited for a setup to unfold and when the setup matches all their entry criteria, it should not fail that easily. These types of traders are the ones that misinterpret the concept of winrate as described above and assign the attributes such as ‘good’ or ‘bad’ to trades.
When a trader gets married to a trade, meaning he feels emotionally attached because he thinks it’s a great trade that should make profits, he is less likely to cut a losing position.
Experienced Trader: A trade is a trade
Experienced and profitable traders have adopted the mindset that every trade can fail and that it is out of their control to know which trades will fail and which trades will make profits. They also know that the outcome of one single trade has no meaning in their trading career and therefore they will not let a normal trade turn into a big losing trade.
As long as a setup matches your trading rules and the long term winrate works together with the risk:reward of the trade, the experienced trader knows that the only possible outcome is to make money over the long term, even if their his trades will fail and fail again.
Conclusion: Once You Don’t Care About The Outcome Of A Trade, You Can Be Profitable
A trader should not lose his head over a losing trade and trying to force winning trades by trading based on emotions – it’s the fastest way towards your margin call.
The ability to take losses is a fundamental key attribute of a consistently profitable trader. And without the ability to not-care about the outcome of trades, a trader can never achieve long term success. If you want to become a profitable trader, you have to adopt the following concepts:
Don’t confuse long term winrate with the likelihood of a trade failing
The outcome of one trade doesn’t matter for your overall performance
Don’t get married to trades, a divorce is expensive
Even if a setup matches all your entry criteria, it will fail and that’s not your fault
We can’t stress the importance of having a solid trading plan and a trade checklist enough. If you plan your trades in advance, you are less likely to make impulsive trading decisions or violate your rules.
Purpose
As a trader, nothing should come as a surprise. You plan your trades in advance, you define your risk and the worst-case scenario, you know when to get out, when to take profits and you process all available information. If you find yourself in a situation where you have to deal with the unexpected, something went wrong.
Progress
To overcome negative trading patterns, tracking and analyzing your performance is the only way you can improve as a trader. Most traders make the mistake that they will never look at a trade again after they close their position and, therefore, leave out an important learning effect.
Protection
Protection does not only include having a stop loss in place, but it goes much further. Once in a trade, traders often act like a deer staring into headlights, unable to make rational decisions. Where and when do you lock in profits? Do you move your stop loss order to protect your position? When will you take profits ahead of your target? What are the criteria that will make you close your trade early?
Conclusion
A structured approach and a pre-defined game plan will keep you out of trouble. Trading should be a repetitive profession; each day you follow the same routine, you look for the same setups and just repeat your process over and over again. If you recognize that your behavior and actions deviate from the usual routine, something is going wrong and you have to counteract.
Men generally risk it all because we have little patience. We are the hunters, the breadwinners, and the providers. If we aren’t willing to risk our lives to bring home the bacon, who will?
But that is in our DNA, and something (that while honorable) needs to be tempered with our ability to logically reduce our risk and remain profitable. Here are a few ways that we can bring home the bacon, without losing the farm.
Don’t trade before you are ready. Make sure you well educated before you go up against trading professionals.
Don’t risk more than 1% of your trading capital, over more than 3 trades simultaneously. This will save you from drawdowns that are insurmountable.
Don’t delay when it comes time to taking your winnings off the table. Don’t be afraid, or too greedy to cash in.
Don’t pull your winning trades too quickly. Learn to trust in your signals, and let your winners run.
Don’t let your ego get the best of you. Focus solely on the profits and you will be successful over the long term.
Trade with the trend within your time frame. Don’t fight it.
Focus on the big wins tempered by small losses. This is the secret to long term success as a trader.
Trade with a plan, and don’t rely on your emotions or others opinions.
Ask experienced traders for their advice. There is no shame in seeking counsel.
Trade a strategy based on historical price actions, rather than predictions about the future.
The first and most important rule is – in bull markets, one is supposed to be long. This may sound obvious, but how many of us have sold the first rally in every bull market, saying that the market has moved too far, too fast. I have before, and I suspect I’ll do it again at some point in the future. Thus, we’ve not enjoyed the profits that should have accrued to us for our initial bullish outlook, but have actually lost money while being short. In a bull market, one can only be long or on the sidelines. Remember, not having a position is a position.
Buy that which is showing strength – sell that which is showing weakness. The public continues to buy when prices have fallen. The professional buys because prices have rallied. This difference may not sound logical, but buying strength works. The rule of survival is not to “buy low, sell high”, but to “buy higher and sell higher”. Furthermore, when comparing various stocks within a group, buy only the strongest and sell the weakest.
When putting on a trade, enter it as if it has the potential to be the biggest trade of the year. Don’t enter a trade until it has been well thought out, a campaign has been devised for adding to the trade, and contingency plans set for exiting the trade.
On minor corrections against the major trend, add to trades. In bull markets, add to the trade on minor corrections back into support levels. In bear markets, add on corrections into resistance. Use the 33-50% corrections level of the previous movement or the proper moving average as a first point in which to add.
Be patient. If a trade is missed, wait for a correction to occur before putting the trade on.
Be patient. Once a trade is put on, allow it time to develop and give it time to create the profits you expected.
Be patient. The old adage that “you never go broke taking a profit” is maybe the most worthless piece of advice ever given. Taking small profits is the surest way to ultimate loss I can think of, for small profits are never allowed to develop into enormous profits. The real money in trading is made from the one, two or three large trades that develop each year. You must develop the ability to patiently stay with winning trades to allow them to develop into that sort of trade.
Be patient. Once a trade is put on, give it time to work; give it time to insulate itself from random noise; give it time for others to see the merit of what you saw earlier than they.
Be impatient. As always, small loses and quick losses are the best losses. It is not the loss of money that is important. Rather, it is the mental capital that is used up when you sit with a losing trade that is important.
Never, ever under any condition, add to a losing trade, or “average” into a position. If you are buying, then each new buy price must be higher than the previous buy price. If you are selling, then each new selling price must be lower. This rule is to be adhered to without question.
Do more of what is working for you, and less of what’s not. Each day, look at the various positions you are holding, and try to add to the trade that has the most profit while subtracting from that trade that is either unprofitable or is showing the smallest profit. This is the basis of the old adage, “let your profits run.”
Don’t trade until the technicals and the fundamentals both agree. This rule makes pure technicians cringe. I don’t care! I will not trade until I am sure that the simple technical rules I follow, and my fundamental analysis, are running in tandem. Then I can act with authority, and with certainty, and patiently sit tight.
When sharp losses in equity are experienced, take time off. Close all trades and stop trading for several days. The mind can play games with itself following sharp, quick losses. The urge “to get the money back” is extreme, and should not be given in to.
When trading well, trade somewhat larger. We all experience those incredible periods of time when all of our trades are profitable. When that happens, trade aggressively and trade larger. We must make our proverbial “hay” when the sun does shine.
When adding to a trade, add only 1/4 to 1/2 as much as currently held. That is, if you are holding 400 shares of a stock, at the next point at which to add, add no more than 100 or 200 shares. That moves the average price of your holdings less than half of the distance moved, thus allowing you to sit through 50% corrections without touching your average price.
Think like a guerrilla warrior. We wish to fight on the side of the market that is winning, not wasting our time and capital on futile efforts to gain fame by buying the lows or selling the highs of some market movement. Our duty is to earn profits by fighting alongside the winning forces. If neither side is winning, then we don’t need to fight at all.
Markets form their tops in violence; markets form their lows in quiet conditions.
The final 10% of the time of a bull run will usually encompass 50% or more of the price movement. Thus, the first 50% of the price movement will take 90% of the time and will require the most backing and filling and will be far more difficult to trade than the last 50%.
There is no “genius” in these rules. They are common sense and nothing else, but as Voltaire said, “Common sense is uncommon.” Trading is a common-sense business. When we trade contrary to common sense, we will lose. Perhaps not always, but enormously and eventually. Trade simply. Avoid complex methodologies concerning obscure technical systems and trade according to the major trends only.
