03 November 2019

Would You Have Stepped On This Banana Peel?

TAOST Trading Rule -- Don't Trade Against The Higher Trend

Yeah, yeah I know... making a statement in the negative is a no no... But it is a rule after all.

The point of the rule is to keep traders (especially Swing Traders) out of trades that are structured against them.  

Don't know what I mean?  It's simple... Don't get short when the tide is rising... and don't buy when the tide is headed it out.  Both trades are the epitome of spitting into the wind.  In trading, you want the wind at your back... always.  When you go against the wind on a regular basis, you're bound to get it in the face eventually.

An example...

Bruker Corporation [BRKR] looked all geared to collapse after a big drop several weeks ago.  I call the move from the bottom of that drop a drift as in price drifts higher against the strong move down.  Given that move against the big drop it seemed pretty likely that price would fall back... at least temporarily.

Apparently the company thought better of that.

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