WHY A CROSSHAIR?
Why did I choose a crosshair to help me describe my trading strategy? It has much to do with the similarities between the crosshair’s purpose and my purpose as a trader and my desire to help others master the speculative game of trading. Let me explain.
A crosshair consists of two perpendicular lines focused on a center of interest. It is a very simple concept really, when you think about it. The crosshair simply acts as a guide for hitting a desired target, much like the trader who wishes to hit a profit target once a trade has been initiated.
TRADING IN THE CROSSHAIRS is a simple to understand trading strategy whose center of interest is based on a potentially profitable, repeatable price pattern designed to help you better control any number of self-defeating emotional habits (e.g., greed and fear) that we all have experienced both in and outside the charts. When focus is combined with patience and discipline TRADING IN THE CROSSHAIRS can help you attain a higher possibility of success by pinpointing an exact entry and potential exit for each trade, while managing the risk associated with speculating.
Take a few minutes to read the following. Afterwards, if you agree with me about the basic principles described here then TRADING IN THE CROSSHAIRS may provide the stock trading edge you so desire.
THE MOST DIFFICULT “EASY” MONEY TO MAKE
How many ads have you seen that begin like the following?
MAKE YOUR FORTUNE IN JUST MINUTES A DAY TRADING THE “XYZ” SYSTEM
96% WINNERS WITH LITTLE OR NO RISK TRADING THE “ABC” SYSTEM
The internet is rampant with get rich quick schemes like these. Trade long enough and you find these systems to be nothing more than scams to take advantage of the gullible and the desperate. Unfortunately, these “get rich quick” systems, along with their indicators and chart patterns, accomplish little more than to line the pockets of those selling hopes and dreams. Don’t be a sucker by falling prey to such deceptive practices.
The truth is that stock market speculation is the most difficult “easy” money to make. Difficult because it requires an uncommon discipline and tempered expectations which few possess; easy because all that is required to make money is to buy and then sell at a profit…no sweat from physical labor; no diplomas needed. A phenomenal amount of money can be made quickly without any effort; therefore, there are those who would have us believe that it is easy to make money all the time. It is not. It is difficult because the unknown future is…well…unknown and it takes a few of us a little longer than others to figure out that the markets give…and the markets take, regardless of any technical indicator, chart pattern, or analyst’s forecast.
TRADING IN THE CROSSHAIRS requires that we 1) accept the unknown by managing our expectations (win, lose, or draw); and 2) build the skills necessary to follow through with a disciplined PROCESS. We work on the PROCESS for a lifetime of trading success. We do this by accepting the TRUTH about the ways of the market, not the futile hopes and dreams promised by fortune tellers.
SIMPLICITY: PRICE IS ALL THAT MATTERS
All technical indicators and chart patterns do the same thing…track price. Therefore, price is all that matters. Indicators serve no other purpose than to indicate where price has been, not where price is going. Since we cannot predict the future, as stock market traders we speculate where prices may go using indicators that track where price has been. It is not any more difficult than that.
Those who believe indicators can tell the future make trading much too complicated as they eventually face the realization that no matter the indicator or price pattern, all that matters is the present. A certain future is never, well, quite so certain and the future rarely, if ever, turns out exactly as planned. The future cannot be foretold by any indicator, new or old or by any person who utilizes one or many.
TRADING IN THE CROSSHAIRS requires that we use indicators that help us determine possible money making opportunities, knowing that in the end, price is all that matters. Price goes up, price goes down, and price goes sideways. That is it. When price is not doing what we anticipate we sit and wait. When in a trade we allow price to determine when to cut the losers and how long to hold on to the winners. Period. We do this by tracking price on both the DAILY and WEEKLY charts, looking for profitable opportunities on both time frames…at the same time. We do this on high volume, leadership stocks across all sectors and industries. We refer to these opportunities as DUAL CHART CROSSHAIRS (DCH) and ITCHs (stocks In The CrossHairs). We do so with a very simple philosophy…price is all that matters.
AN EDUCATION…NOT INDOCTRINATION
Most stock trading courses are designed around the system creator’s ego, wherein the trader is expected to learn by trading exactly the way the guru supposedly trades. Many of these gurus have contest trophies showcasing their abilities and track records pointing out all of their big winners. Unfortunately, successful trading is not about following the advice of a self-proclaimed guru. Successful trading is about self-discovery and forging your own path to greatness.
As most of us have heard and understand, give a fish and eat for a day; teach how to fish and eat for a lifetime. In the same way, the best trading courses are designed with the creativity of you, the individual trader in mind, allowing for the “art of the chart” if you will. A trading strategy should teach by providing the tools necessary for success.
TRADING IN THE CROSSHAIRS allows you, the individual trader, to make trades based on your understanding of the edge presented, in an environment that promotes education and creativity. In doing so, you make the trade your way. For example, we will discuss several different types of breakouts, using the ITCH indicator as a guide. As a trader, you will determine which one or ones make the most sense to you. Once understood you can then determine the proper comfort level for the loss targets and profit targets for each breakout trade.
I truly believe that the best traders plan for both losses and gains before a trade is taken. They do so by envisioning a successful trade and an unsuccessful one. This can only be accomplished by “seeing” the trade as it unfolds. We discuss the trade opportunities…but you make the final decision based on the thorough analysis presented. Our studies will focus not only on opportunities but on the educated decisions necessary to take advantage of those opportunities.
TIME IS VALUABLE BOTH IN…AND OUTSIDE…THE CHARTS
Time is not guaranteed; therefore, it is up to each one of us to take advantage of it both in…and outside…the charts. Preparation is key. Making good, solid stock trading decisions under conditions of uncertainty requires us to be prepared and ready to take advantage of opportunities when they arise. Markets are too uncertain and move too fast to be unprepared. Successful traders make money off the unprepared, ready to move in and out of positions at pre-determined points with unparalleled focus, patience, and discipline. The unprepared, however, trade recklessly off pure emotion and adrenaline, much like the weekend gambler in Vegas who, with luck, may strike it rich once in a while but then lose it all just in time to head home with empty pockets.
TRADING IN THE CROSSHAIRS helps prepare you, the trader, for opportunities. We discuss specific trades on two time frames which allow us not only to take advantage of opportunities in the charts but to have more time to enjoy life outside the charts. Crosshairs Trading is not day trading for pennies but big chart trading for dollars. Our charts and indicators will point us in a possible direction for days to weeks, allowing us to focus on time and money management, while enjoying life where it really matters, outside the charts.
THE RIGHT TRADE AT THE RIGHT TIME
Markets are constantly changing. Markets trend; markets consolidate. There are bullish markets and there are bearish markets; therefore, no one stock trading strategy can be used successfully under all market conditions. This is one of the reasons that a specific trading system, such a trend trading one, can fail miserably when markets are consolidating or why a system that takes advantage of volatile markets has difficulty producing consistent profits in a trending market. You, the trader, must be flexible and ready to change with any change in market conditions. You must be ready and able to use the right market tool at the right time. Just like a hammer is a wonderful tool for driving nails but worthless when it comes to changing a tire, a trend trading system is great for trending markets but worthless when markets are consolidating. It is a must that you focus on the right trade at the right time.
TRADING IN THE CROSSHAIRS prepares you to take advantage of both bearish and bullish markets, whether trending or consolidating. You will have and are able to use the tools necessary to take advantage of each market condition when called upon to do so. We discuss two stock market strategies so that when the conditions call upon us to trade the trend (DCH/ITCH) we do so; when conditions require us to trade the consolidation (FBO/TIW) we do so.
If you want to work through the hard part about making easy money; want things simple to understand; want to be educated and not indoctrinated; want to enjoy valuable time outside the charts; and want to make the right trade at the right time, then TRADING IN THE CROSSHAIRS may be just what you have been looking for.