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Stock Chart patterns alone do not drive price.

The value added by using a trading coach is to make you aware, simultaneously, of market dynamics, those things

off the charts
that affect price action while appreciating what the charts are showing.

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 About WSW

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 Overview of Trading

 4 Step Trading


Chart Checklist
 Off-Chart Checklist


 Fear and Greed


 Sector Rotation

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How To:

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 Short stocks 
There are things aside from a stock or index chart that are always ready to blindside you in a stock or option trade in the stock market.

Things you should know before you enter a stock or option trade. Get a trading coach.
Looking At Items Not On The
Chart That Will Affect Your Trade
Put the trading odds in your favor.
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Why is this important? 

Did you compute the risk/reward?

Is this trade worth doing based on the risk/reward ratio?
Is the stop a reasonable distance away from the entry?
Are you willing to lose that amount if the trade goes against you?
You need a minimum 2:1 Risk to Reward Ratio. Do this first before going too far, you may not even have a potentially profitable trade.

What are all the Trends?

Is this a bottom-up or top-down approach?
Verified the stock trend or lack of it?
Verified the sector trend?
Verified the broad market trends, the Dow, the S&P, NASDAQ?
For the ideal trade, we look for stocks in up or down trends because the price action tells us the stock is in or out of favor.  You have a higher probability trade if the stock, the sector and the broad markets are all trending in the same direction.

What's is the news?

Check news headlines going back 30-45 days.  Any unresolved issues that could or would be resolved while you may own the stock, i.e., court or regulatory rulings yet to be announced?
Is the news generally positive or negative?
Is there a headline mentioning some sort of pending action, i.e. court decision, regulatory decision, analyst upgrade or downgrade..etc.
Is there a split announcement? 
This is part of the stock's environment, just like the trend.  You don't trade the news, you trade the reaction to the news.

News will trump any chart pattern.
When will earnings be announced? When will earnings be announced?
Is their a "powerhouse" in the stock's sector that is about to announce?
You don't want to own the stock on the announcement date and you may not want to own it if a "powerhouse" in its sector is due to announce soon either.
What government economic announcements
are due this week and next?  When you use Yahoo link and click on the Statistic of the day it will rate it from A to F in terms of significance.
Are any of the coming economic announcements rated as an "A" or "B" ? The government's weekly announcements every week can and do affect the markets, sometimes in a very big way.  "A" or "B" ratings on the announcement can be very powerful in consequences.
What do the fundamentals say? Are company earnings going up or down from quarter to quarter? 
Verified the relative strength of the company compared to its sector?  Does it lead the pack?
Checked the last quarterly earnings announcement in the news for comments regarding the company's expectation for the next quarter?
These items, when verified, have more to do with giving you added confidence in your trade and position.  Positive chart with positive fundamentals with positive trends lend themselves to profitable trades.

Decide on a strategy?

Go Long the stock?
Go Short the stock?
Buy the call option?
Short the call option?
Use an option spread, straddle, collar, etc.?
Buy the put option?
Short the put option?
Hedge with an option or a futures contract?
Go long a futures contract?
Go short a futures contract?
You have to have an entry and exit strategy.  What will you do if the trade goes against you?  Is the trade going against you based on company specific news?  Sector news?  Broad market's news?  

Are you keeping notes, a journal, on your trade?  What are you learning from your trade journal?

  What specifically did you see in the chart's indicators?
  How is the sector doing?
  What are the broad market conditions?
  Any other research you did that pushed you to act?
  What off-chart events were you reacting to, if any?
  Note, if there is a negative sign or two that you observed, you need to make note of that as well.


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