May 9, 2013
Uncategorized
By Geoff Bysshe
WOULDA-COUDLA-SHOULDA
All the Woulda-Coulda-Shouldas
Layin’ in the sun,
Talkin’ ‘bout the things
They woulda-coulda-shoulda done…
But those Woulda-Coulda-Shouldas
All ran away and hid
From one little did.
It was my 8 year old who lead me to these remarkably insightful words of poet Shel Silverstein taken from his book “Falling Up”. As I read these words at my son’s request for bed time, I couldn’t help but think of the condition of the markets a few weeks ago.
On 4/19/13 the SPY, DIA, and IWM all closed over their prior day high after a nasty 5-day beating, and the QQQ had an Inside Day pattern on its 200-day moving average. It looked like the markets had failed badly against multi year highs. I felt like I had to cover my eyes and just buy long positions based more on discipline than confidence. My gut was convinced cheaper prices were just days away, but my discipline saw one of my favorite trade setups.
My gut was wrong, but my discipline was right.
Now that the markets have rallied in excess of 5% in a few short weeks since that day, that retracement reversal seems remarkably obvious. However, the only traders that deserve credit for seeing that are the ones that “did”.
As the market continues to feel like it’s falling up, it is a good time to be honest with yourself and answer this question…
Do you feel like ‘Woulda-Coulda-Shoulda’, or a ‘did’?
The correct answer is the honest one.
If you feel like a Woulda, beware of trying to make up for missed opportunities. That’s how traders make big mistakes. There will always be another good trade. Focus on identifying a trade set up that you like, wait for the right time to strike, and…
When you know the time is right, but you’re having trouble pulling the trigger – position size correctly and re-read the words of Shel Silverstein above.
If you don’t have a trade setup you can trade with discipline then find one! MarketGauge has plenty of ways to help you with that. Attend one of our many free live webinars. Subscribe to our free resources – this blog, the weekly Market Outlook, and Mish’s Daily. Or just send us an email at [email protected] and ask how best to get started.