Be Realistic ! there are always alternative scenarios
it is vital for all traders to control their emotions. getting excited is natural for everyone but if you want to be a successful trader you have to learn how to control your feeling. we trade based on the facts not feelings!.
there are always alternative scenarios and a wise trader should be prepared in advance. being aware of alternatives can help you to control your feelings and manage your trade well. one tool to manage the trade is using Multi Unit Trade Strategy which will be discussed in another separate post. Here I want to introduce some alternatives for market path when a trader enters to a trade after an ABC correction .
First I should emphasize that I used BIDU chart just as an example and I do not claim that BIDU will follow what has been shown on the chart.
Alternatives after a possible ABC corrections are:
1- starting a new impulse wave and making a new major high : traders hope for this scenario and enter into the trade for making noticeable profit but does it always happen?
2- what we consider a wave C is not actually what we considered and it was in fact wave 3 of a descending impulse wave. experienced traders have faced this scenario many times. I showed this possible scenario on the BIDU Chart.
3- Stock may make a flat correction. this alternative has been drawn on the chart and you can see it's internal structure. flat corrections can be very misleading. be cautious !.
4- Dobule or triple Three correction. this scenario may pose huge loses to unexperienced traders when they feel correction is over and they see market is going up but suddenly every thing will change. Also recognizing a new entry point is not so easy in this type of correction. an example of a Double Three Correction has been shown on the chart.
Good Luck Friends
there are always alternative scenarios and a wise trader should be prepared in advance. being aware of alternatives can help you to control your feelings and manage your trade well. one tool to manage the trade is using Multi Unit Trade Strategy which will be discussed in another separate post. Here I want to introduce some alternatives for market path when a trader enters to a trade after an ABC correction .
First I should emphasize that I used BIDU chart just as an example and I do not claim that BIDU will follow what has been shown on the chart.
Alternatives after a possible ABC corrections are:
1- starting a new impulse wave and making a new major high : traders hope for this scenario and enter into the trade for making noticeable profit but does it always happen?
2- what we consider a wave C is not actually what we considered and it was in fact wave 3 of a descending impulse wave. experienced traders have faced this scenario many times. I showed this possible scenario on the BIDU Chart.
3- Stock may make a flat correction. this alternative has been drawn on the chart and you can see it's internal structure. flat corrections can be very misleading. be cautious !.
4- Dobule or triple Three correction. this scenario may pose huge loses to unexperienced traders when they feel correction is over and they see market is going up but suddenly every thing will change. Also recognizing a new entry point is not so easy in this type of correction. an example of a Double Three Correction has been shown on the chart.
Good Luck Friends
