One of the biggest mistakes traders make is evaluating setups without considering the environment they're trading in.
A breakout can be the exact same pattern on two different days and produce completely different results.
Why?
Because the market backdrop matters.
As @Qullamaggie says:
"You want to trade aggressively when the indexes are above their 10/21 EMAs, ideally when they're rising. That's when the big money is made."
Most traders read that quote and move on.
Instead, go study it.
Pull up charts from periods when SPY and QQQ were above rising 10 & 21 EMAs.
Then compare them to periods when the indexes were below those moving averages or when the averages were flattening out.
Look at:
-Breakout success rates
-Relative strength leaders
-Follow-through after entries
-Number of stocks making new highs
-Average trend duration
-How often pullbacks get bought
You'll start to notice something:
The best stock setups tend to appear when the overall market is providing tailwinds.
Many traders spend years trying to perfect entries while ignoring the single factor that has the biggest impact on their results... the market environment.
Before analyzing individual stocks, analyze the conditions those stocks are trading in.
The trend of the indexes often determines how much opportunity is available.
I’d rather be early than miss the entire move because I’m fixated on one specific price region.
I was early selling my spot position at $112K, and $BTC eventually pushed to $126K. But the broader thesis was inevitably correct.
That’s exactly what’s going to happen to a lot of people this time around. They’ll keep lowering their targets and finding new reasons why price has to reach that level.
Eventually, they’ll become so anchored to their preferred entry zone that they miss the entire move higher.
Then, out of frustration for not getting the entry they wanted, they’ll end up shorting a bull market instead of participating in it.
There is nothing wrong with being prepared in a market where nothing is guaranteed.
The UnR will be your best friend in the coming weeks...
As stocks start to setup in big bases, trying to trade this chop and catch breakout without momentum will be difficult
BUT
The undercut and rally can save you from the chop
Incredible UnR's today across the board
Not the last time you will see these opportunities so make sure to train your eyes.
One of the most important things Ive learned in trading is:
Focusing on stocks that are in the upper right hand corner of your screen
Not stocks trying to bottom.
Not stocks "that look cheap."
Not stocks that are down 80%.
The biggest winners are usually making new highs, holding above key moving averages, and showing persistent relative strength.
Our brains are trained to look for "deals", on stocks that are way oof the highs and lagging...
But when you start training you eyes to look for stocks that are leading, you'll start seeing that they are leading for a reason...
The best stocks go higher for a reason.
This changed the way I scanned the market...
I know scan for:
-52 week highs
-Stocks that doubled over 52 weeks
-Above the 21 EMA and 50 SMA
-Relative strength vs. the market
-Accumulation volume
-Strong sectors and themes
These stocks create my larger watchlist that I review each day for setups, in the stocks/groups that are the strongest....
Instead of trading A+ setups in lagging groups/sectors
I want to point something out, and I mean no offense. But some of you need to hear this.
People on X get way too caught up in a stock’s tribe, culture, community, heroes and villains.
The stock does not know you.
The stock does not care about you.
And quite frankly, the price itself is just a temporary negotiation between fear, greed, liquidity and time.
Stop caring about the bullshit. Be ruthless. Drop the fanboy behavior and focus on what actually matters.
Money.
If all you ever did was:
1. Find trending stocks
2. Buy them at daily 21EMA
3. Ride them until it breaks
you'd not have to worry about what others think of a stock.
Study: $SIVE $INTC $MRVL $MU $NOK $SNDK
All trends start at 21EMA.
All of them.
Cardinal rule of trading-do not turn a profitable trade into loss-ever!! You can always put the trade back on, but you can never get back lost money. Lost money is history-it is gone, lost...... Move on to the next trade. If the trade starts to work again, slap em back on.
One of my most repeated mantras is, "okay Augustus, let's not waste time."
Then, with an immediate boost of enthusiasm, i jump into what ik i must do
Reducing latency between thought & action is something i've been working on since my youth
Later, i recognized this is the essence of agency, and most progress in life depends on developing & practicing it daily
All it takes is a single trip, a one-off conversation, a sudden epiphany while on a walk, a particular passage at just the right moment, or a blessing disguised as uprooting disaster to rekindle your zeal for life and set your heart ablaze
My FRIENDS. You must LISTEN on what to do next week.
EVERYONE is watching $SPY and $QQQ.
I'm watching $SMH and $DRAM.
Because the leaders tell you the truth before the indexes do.
The AI trade is finally cooling off. Because we became too extended.
Now both Semiconductor and Memory leaders are testing their Weekly 8 EMA after historic runs. $SNDK $MU $ARM $NVDA
This is the area that matters.
If they hold:
• AI resumes leadership
• The bull market continues
• New highs eventually follow
If they fail:
• Expect more volatility
• Expect more fear
• Expect better opportunities
Either way, I'm not panic selling.
I'm not going all-in.
I'm scaling slowly into the highest conviction names while keeping cash, hedges, and defensive positions.
The biggest mistake investors make is thinking they need to pick the exact bottom.
You don't.
It’s about being patient for the bottom to present itself
Watch SMH.
Watch DRAM.
They will tell you where this market goes before $SPX does.
This is how you make MILLIONS.
If I hosted a session on how you can best utilize Flowseeker to track the whales and front run insane moves like today would you be interested?
Drop a like and comment below if you’ll attend.
9:00 PM Eastern tomorrow night.
Unless I end up going to dinner with @astocks92 😆