New Buy Signal?
There was an that was established two days ago, and the high was compromised which constitutes a new buy signal BUT a signal alone is not enough. The 3K point move is likely still in play and there is a good chance that the first retrace attempt will fake out. (Wave B in ). So it does not qualify for a new swing trade long.
IF a new high is not established over the next couple of days, price is likely to test the 16K for a second time. THAT is when a or failed low pattern can appear and THAT fits the criteria that we look for in a high probability setup. (See blue box in the 16K area).
Value Of WAITING.
Since the rally from 14K to the peak in the high 19Ks, there were 4 buy signals. Based on our strategy and how we determine targets, only 1 of the 4 would have likely reached all 3 targets. Since our average profit is around 1K points, IF we had taken all 4 trades our outcome would most likely be break even at this point or slightly in the red. More trades do not yield better performance. Instead, we forfeited all 4, took no risk, and still have our capital intact from the wins we had back in October. HIGH probability trades are INFREQUENT, and WAITING for them doesn't cost anything. Patience PAYS not more trades.
Many have trouble with this not because it is hard to understand, but because it goes against our inner emotional environment. Human nature does not react effectively to an abstract random environment such as a financial market. First you need to become aware of your own cognitive and emotional biases before you can consistently recognize high probability opportunities. More about this in today's webinar.
Thank you for taking the time to read my article. I hope you found it insightful.