Current market conditions and how to really trade correctly in current market cycles what do i mean by market cycles now a lot of people think about okay the market is going to last pretty much the same during the year and personally i’ve been trading over five to six years and there’s a lot of actions going on.
MARKET VOLUME – You have to basically adjust your strategies year by year based on how much volume is trading on the current market conditions so let’s compare the last three months and while we are trading in today’s market so back in may june and july we’ve been getting anywhere between 200 million shares to 400 million shares on one day now let’s look at the examples at kldk the sticker traded around 200 million shares around thirty dollars now thirty times two hundred million shares that’s close to six billion dollar trade in one day now let’s look at grnq this sticker traded around 100 million shares at three dollars so the total dollar has being traded in that day is around 300 million so when you see a dramatic decrease on the volume by looking at around two weeks of increments you can clearly see there’s something going on in there and the kodk basically wiped out a lot of buyers and sellers then they want to take a break that’s where the market cycle starts.
TRADING HABITS – Now let’s get into our trading habits so when you are short sellers or consist any profitable trader especially we on a winning streak it’s really easy to make that type of mistakes because you think the current market conditions did not change and you want to make the same amount of risk or same amount of size to risk into a ticker then that’s where you start to make your first mistakes because personally i did make a lot of mistakes like that as i said in the previous video the biggest losses come after the biggest win after when you enter into a market cycle you have to be really really careful with how you’re supposed to set a name and the second point you want to look at in terms of statistics when you are entering into a new market cycles and you see there’s dramatic volume decrease and you want to compare.
NEW MARKET CYCLE – So entering the next market cycle or not because you don’t want to make the mistakes that you want to adjust your size or just your risk kodk as I said traded about six billion dollars in one day now we’re beginning around 600 million dollars in one day so that’s a big bond decrease and we can use that statistics to basically tell us that we’re entering into a new market cycle now statistics performs very different when you are entering a completely new area because when you are shorting into resistance especially like mtp and grnq these type of tickers do have a tons of resistance but in average statistics that typical bouncer only can bounce up to 70 percent from the resistance when we’re entering a new cycle that buyers and sellers are too eager to get into a trade because they think the market is still the same so mtp and grnq almost bounce up to 100 to the resistance point if you’re not careful you’re basically risking another 20 to 30 percent losses from your original positions so my solution will be i tend to avoid the first or second play if there’s a really boring market lasted for about two to three weeks you want to avoid the first or second heavy volume traded ticker because all these type of pattern will perform really weird because people are trying to get in very very fast
Psychology – The last point I want to make is the psychology behind these type of tickers when you are so used to one market your brain is said to I want to trade the same way that i traded for the last two weeks so when i sizing into one point and I see a very boring market everybody wants to go in and make their consistent again and potentially more profits and that’s where you are making the first mistakes as a patient consistently profitable trader you are basically taking advantage from the first wave of people making their mistakes to create opportunities for you that you can take advantage of so that type of psychology is very important and that is one of the major reasons I avoid the first or second play.
Bounce Short – So let’s look at grnq this is a bounce short that traded tons of volume which is the second play after mtp you can see the volume traded much more than the resistance volume normally by average statistics the stock can only bounce up to70 to 80 percent from the resistance so average pushing is around 2.5 or 2.4 the resistance points at 2.8 you actually respect it all the way to 3 then dumped it all the way to 1.5 so this is one of the outliers that happens in the market especially when we’re entering into a new market a lot of people are eager to short into it and a lot of people wants to make some type of action that’s why it’s going to make the chart much harder to predict compared to usual so there’s not much going on this month and i personally tracked a lot of statistics in different market cycles these type of boring sessions normally last about two to three weeks sometimes a month or two it doesn’t last very long especially where in 2020 just make sure be patient and when you see a dramatic change on the volume always wait until the third place comes out that can keep you from making mistakes and also potentially can save you a lot of money so hopefully my advice are helpful and being patient is the key to win in this market.
Thank you so much for read this.