This was a crazy week for the market, especially thanks to trades like the one I had in GLNG. As I predicted a few weeks ago, the SPY tested the $182 price level which was about a -17.3% decline from the all time high reached in summer 2015. I didn’t need a magic ball to predict this would occur because the fact is stocks move a defined way and if you understand the markets unique frame work, which I go into great detail explaining here, it becomes much easier to see what most likely will occur a majority of the time.
If you can predict a stocks direction 51% or great when trading without margin, that is all you need to make money. Of course for the average person with no trading system and not trading plan this is near impossible. Realistically speaking a 65-75% win rate is much more easy to handle psychologically and that is about where my average win rate is. If you come across one of these so-called guru’s that claims to win greater than 75% of the time you should be very skeptical since this is extremely difficult, if not near impossible and for most people besides high frequency trading firms, and hedge funds trading on inside information, will never be able to do this. I would run far, far away as quickly as possible or you risk losing all your money to these scum bags.
The huge sell off in China’s market impacted global markets from the huge mega caps down to tiny micro cap penny stocks. Oil dropped a huge amount all the way down to a low of $26 a barrel before spiking 7% back to 31. There has been an increased correlation between stocks and oil and that has not been good for the general public who hold long term hoping and praying they’re investments won’t tank on them.
The good news for a trader like myself is that huge sell offs result in not only many short selling opportunities but also large buying opportunities in the form of bounce trades as was the case in many stocks on Friday 1/22/16. I nailed the bounce in several stocks closing out the week on a great note.
I also had a couple great long trades in FNMA and GLNG both of which made huge moves this past week. Some of my students also banked on these stocks as well which makes me very happy that more people are benefiting from my trading system. They have become self sufficient which is exactly what all traders must learn to do if they want to make big money in the market. Everyone thinks you can follow someone else’s trade alerts and try to piggyback off some guru but I can assure you that this is near impossible to do consistently. You may make a money here and there due to pure luck, but over time you will lose money I can guarantee. The people out there selling these alerts services are trying to convince you otherwise are doing so to take your money. Don’t trust these bastards. The fact is you never can get the same price on your entries and exits as these people.
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