Stop Buying Breakouts, Do This Instead 

I am going to explain how to get better trading results by not buying breakouts! We are not in the previous bull market anymore!

The problem is that the "easy money" made in the raging bull market propped up by QE has conditioned traders into buying breakouts because they worked.

Unfortunately, folks (me included) have gotten spoiled and now that breakouts aren't working we don't know what to do and when to stop.

The primary reason why we can't stop is that we are addicted.

We are addicted to the results gained in the previous bull market and now that conditions have changed, we have failed to adapt. This may result in a whole host of problems that impair our ability to make money in the market.

• We have inflated expectations about the market from the previous bull market.

• We are psychologically damaged from recent disappointment and failure which drives fear-based decision-making.

• We have a whole assortment of limiting beliefs that argue against our success and prevent us from seeing other possibilities.

• and, we now lack of self-discipline

But the good news is, if you are willing to make the changes that need to be made and willing to get the knowledge you really need to win, the markets will open their doors to you just like they have before.

Here's how step by step:

Step 1: Realize deeply that the Market is always right!

We can not control what markets do, all we can control is how we react to what markets are doing.

Learn to control your perception of what the market is doing.

The more sophisticated you become as a trader, the more you have to realize that trading is not you against the markets, it is just you.

In 2021, following an amazing year in 2020, I had my first major drawdown where I gave back nearly half the profits I earned in the prior year.

Something fundamental had changed about the market and what I was doing was no longer working, but I refused to adapt and paid the price.

Fortunately, I stopped trading altogether once I couldn't take the losses anymore. I stopped trading for nearly 6 months.

This break gave me the time I needed to refresh my perspective and find new skills that I was missing.

Sensing the impending potential bear market, I prepared myself to begin shorting the market. In January 2022 the bear market ensued and I made up my losses and then some.

The market is a constant feedback machine. When you are taking losses and things are not working for you accept that you are wrong and that the market is always right. Take a break and fill the gap in your skillset. Come back when you are confident.

Step 2: Release yourself from the demand of prior expectations and limiting beliefs!

Each individual trader creates his/her own experience of the markets based on the picking and choosing of the process and the decisions that result.

Sometimes certain processes work great in one market and are terrible in another.

If you can not release yourself from the demand of your prior expectations from the previous market, then you are locked in a delusion that is limiting your perception of now-moment opportunities.

One way to release yourself from this unrealistic expectation understand that the market is full of limitless opportunities with unlimited ways to make money.

If you just go on Amazon and search for books on trading, you will get thousands of results.

Limiting yourself to just one possible way of making money in the market will limit your perception of the opportunities available to you.

When I first started trading, I was a die-hard CANSLIM trader and would only trade in bull markets.

One limiting belief I had is that you could only make money in bull markets. Of course, this is not true but this belief kept me from making money on the short side of the market.

Realizing the potential that a bear market could have in making money on the short side opened my eyes to the possibility that I was limiting myself.

That realization led me to read a book by Gil Morales called Short Selling with the O'Neil Disciples. This book opened my perception of a new way to make money in the markets.

The only thing left to do is apply that knowledge.

Step 3: Learn a new way and create self-discipline.

Self-discipline is simply a mental technique to stay focused on what you need to learn, or do, to accomplish your goals.

The markets don't owe you anything and they are always right.

You and you alone are completely responsible for what you end up with. Release yourself from the unrealistic expectations of previous markets and if you have a skill gap, then fill it.

To accomplish your goals, you will need to adapt.

When you run into a losing streak, take a break and figure out what you need to know that is keeping you from perceiving the now-moment opportunity in front of you.

Take the time to learn a new skill and begin applying it with discipline.

Learn some new rules, write a new plan of attack, plan your trade and trade your plan.

"As a trader, it is more important to know that you will always follow your rules than it is to make money because whatever money you make, you will inevitably lose back to the market if you can't follow your rules."

Douglas, Mark. The Disciplined Trader™: Developing Winning Attitudes (p. 203). Global Network Publishers. Kindle Edition.

Whenever you're ready, there are 3 other ways I can help you:  

1. If you are looking for traction in this current market environment, then I recommend one of my affordable courses: 

The Art of Trading Workshop - Short Selling Mastery**:**  A multi-step system for making money in the stock market selling short.

2. Want access to a growing community and daily expert guidance on the markets? 

Join my private Discord Community with plenty of free content and premium services like weekly watchlists, trader chat, and my model stock portfolio. 

2. If you are looking for an excellent freebie, then download one of my free guides

Download and study one of my free guides