Don't Be The Jabroni Calling out "New Highs"
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This is incredibly frustrating. In fact, if you're the guy sitting on a trading desk calling out "new highs" or "new lows," someone will tell you to shut the f*ck up. You know why? Because it provides zero value. Everyone sees that the market is strong right now, but even within that strength, there's only so much opportunity for active traders (intraday and swing).
The money is made when there's emotion. When something is just grinding away higher or lower, that's a recipe for "chop" β aka, a great way to lose a f*ck ton of money to computers making the spread. Eventually, they back off, and you get hit out at that random consolidation low you're using for a stop. Then, when you've looked away, they return!
Let's say it again: the money is made when there's emotion!
A rando name on low rvol (rvol= current volume / 3-month average volume) making new all-time highs is NOT where the money is being made.
To be clear, if you're the jabroni drawing random chart patterns on random stocks, thereβs no edge. Please stop wasting your time "ripping" through charts, drawing random crayon marks on them. Instead, try something else.
A good starting point for active traders (both intraday and swing) is focusing on big moves. In simple terms, Big Moves = a stock trading on elevated volume (rvol >1) where multiple ATRs (average true range) are being done. The more ATR's, the better. Over time, you'll be able to quantify (sarcastic, this isn't math) big moves as "holy shit, this is a big f*cking move." With big moves comes big emotion. With big emotion comes big opportunity!
I've written about the trading buckets that most really good short-term traders focus on, so rather than rehashing it, check it out here.
We need fewer jabronis making a living drawing with crayons on charts, calling out new highs or lows to their paying subscribers.
We get it, sh*t is strong right now!
The #1 question to ask: "Is there emotion in this ticker/chart right now?" If yes, focus on it. If no, move on.
By the way, even the best and smartest bigger-picture traders, like Warren Buffett, tend to focus on big moves in great companies. They wait for true panic to get excited. AKA, this applies across all time frames. Price matters. Your chart patterns or shouting "new highs" and "new lows" does not!
*If you want some examples of great opps this year, just follow me on stocktwits & send me a direct message.
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