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Top 10 Rookie Trading Mistakes (And How to Laugh at Your Own)So you’ve just discovered trading. Maybe it started with a Reddit thread. Maybe someone said “trading Nvidia NASDAQ:NVDA is like printing money.” Or maybe you just liked the name “Shiba Inu” and figured memecoins was a good investment thesis. Either way, welcome. This is where dreams are made, lost, rebought on leverage, and then tweeted about. The markets are ruthless, but also educational — if you’re humble enough to learn and bold enough to laugh when you inevitably light your first $100 on fire by accidentally shorting Apple NASDAQ:AAPL during a breakout. This article is for you. The new trader. The (overconfident?) beginner. Let’s talk about the top 10 rookie trading mistakes — and how to laugh at your own before the market does it for you. 1️⃣ Mistaking Luck for Skill (aka “Call Me Baby Buffett”) Your first trade is a win. Your second is too. Maybe it’s a meme stock . Maybe it’s a hot IPO. Either way, you’re convinced you’ve cracked the matrix. You tell your friends: “I just have a feel for this stuff.” What actually happened: You got lucky in a trending market. And now you're about to go full Titanic on a position you didn’t research, because hey — you're "on a roll." What you can do insead, and probably have a laugh about it years later, is screenshot your account right now in your very early steps. Frame it. Label it: Exhibit A in Emotional Risk Management. 2️⃣ The Revenge Trade: “I’ll Win It Back” You took a loss. A big one. Your first real slap from the market. So what do you do? Walk away? Reflect? Journal it? Nah. You go in twice as hard on the next setup. Same ticker. Same direction. More size. Spoiler alert: It doesn’t end well. That type of spiraling behavior usually happens when you think the market owes you something. It doesn’t. Not even an apology. Imagine explaining your decision to a judge. “Your Honor, I lost money shorting Tesla, so naturally I doubled down five minutes later.” Case dismissed — and that’s why revenge trading is so dangerous . 3️⃣ FOMO FOMO FOMO A green candle pops up on your watchlist. It’s moving. Fast. You missed the breakout but you still click “buy” because you’re not missing this train. You get in. It tops. You hold. It drops. You panic. It rebounds… just after you sell. Classic rookie cycle. Why does this happen? The fear of missing out turns off your brain faster than a margin call. Call it what it is — chasing. Say it out loud like it’s therapy: “Hi, this is Patrick and I like to buy things 10% too late.” Maybe it helps. 4️⃣ “I’m Married to This Trade” It started with a spark. The chart looked good. The RSI whispered sweet nothings. You thought, “This could be the one.” So you bought. Then bought again. And when it dipped harder than your last relationship, you said, “It’s okay, we’re just going through a rough patch.” Before you knew it, you weren’t trading — you were in a toxic relationship with a ticker. You’ve abandoned your edge for emotion. Confirmation bias kicks in, and instead of managing risk, you’re managing denial. You stop analyzing the chart and start defending it like it’s your firstborn. If you’re talking about a stock (or anything else on a chart) the way your friend talks about their ex — “It just needs time, I know it’ll come back” — you’re not trading. You’re coping. 5️⃣ All In, All the Time Risk management? Never heard of that. You found a setup that “can’t fail,” so you went 100% in. On margin. On a Friday. What could go wrong? Answer: Everything. Especially when your trade gaps against you on Monday morning after Trump has said tariffs are changing once again. That’s when you know you’re mistaking conviction for strategy. They’re not the same. 6️⃣ Ignoring the Bigger Picture You nailed the 15-minute chart. Gorgeous breakout. But somehow, you forgot to check the daily — where your “breakout” is just a lower high in a brutal downtrend. Oops. Think about whether you've got tunnel vision. You went along with your short-term bias instead of checking the bigger picture when things are different. What you can do instead, is make a rule: before every trade, zoom out. Literally. Leave no timeframe unexamined (at least up to the daily frame). 7️⃣ Trading Every Day Like It’s the Super Bowl New traders think they have to trade every day. Every single session. Every little move. And when there’s no good setup? They make one up, trying to whip up trendlines to justify their trading. What happens next: Boredom trades. Overtrading. Why it happens: You're addicted to the action, not the outcome. What can you do instead? Write down the number of trades you made last week. Multiply it by the average commission you paid. Now imagine what you could’ve bought instead. And, what could be even better, consider taking a lesson in patience . 8️⃣ Blind Faith in Indicators The RSI is at 18. The MACD just crossed. Stochastic says “maybe.” So you buy. No price action. No trend. Just… vibes and indicators. Result: You become a victim of the “indicator trap” — relying so heavily on these lines you forget to read the actual chart — momentum, market sentiment, broader technicals, and fundamentals. What’s a better approach is to ​​treat your indicators like seasoning, not the main dish. The best trades come from confluence, not wishful thinking dressed up as technical analysis. 9️⃣ The Trading Journal You Never Wrote If you can’t remember why you entered a trade, you’re not at your best. Here’s a pro tip: Keep a trading journal . One that records your thesis, entry, stop, target, and outcome. You know — the boring stuff that makes you better. Why is that important? Journaling builds discipline. Patterns. Self-awareness. It’s never too late to start your journal! 🔟 Expecting to Get Rich Quick This is the big one. The rookie mindset that kills most portfolios: I’m gonna turn $500 into $5,000 in a month. You won’t. Sorry. And even if you do, you won’t keep it. Trading rewards patience, process, and preservation. Not YOLO bets and delusions of grandeur. Try looking at your P&L like a diet. If you expect six-pack abs in a week, you’ll burn out and crash your progress. If you focus on habits? You’ll outlive the hype. 📚 Conclusion: Every Trader Starts Stupid Let’s be clear — all of us have made these mistakes, even the big shots out there that run billion-dollar funds. The only difference between a rookie and a pro is how fast you learn from them. Or better yet — how fast you can laugh at them, document them, and evolve. Because the truth is, the market is the most expensive comedy club on Earth. And every trade is a new punchline. So if you're new, mess up. Take notes. Stay humble. And above all — enjoy the chaos. One day you’ll look back at your Doge CRYPTOCAP:DOGE top-buy with fondness. After all, it’s only a mistake if you didn’t learn. Otherwise, it’s just tuition paid for by your trading account. What’s a mistake we didn’t mention? Share your tips, tricks, mistakes, and lessons in the comment section!
SP:SPXEducation
by TradingView
22
Bullish continuation?S&P500 (US500) is falling towards the pivot which is a pullback support and could bounce to the 1st resistance which aligns with the 138.2% Fibonacci extension. Pivot: 5,782.52 1st Support: 5,692.37 1st Resistance: 6,138.06 Risk Warning: Trading Forex and CFDs carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Forex and CFDs may not be suitable for all investors, so please ensure that you fully understand the risks involved and seek independent advice if necessary. Disclaimer: The above opinions given constitute general market commentary, and do not constitute the opinion or advice of IC Markets or any form of personal or investment advice. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, are intended only to be informative, is not an advice nor a recommendation, nor research, or a record of our trading prices, or an offer of, or solicitation for a transaction in any financial instrument and thus should not be treated as such. The information provided does not involve any specific investment objectives, financial situation and needs of any specific person who may receive it. Please be aware, that past performance is not a reliable indicator of future performance and/or results. Past Performance or Forward-looking scenarios based upon the reasonable beliefs of the third-party provider are not a guarantee of future performance. Actual results may differ materially from those anticipated in forward-looking or past performance statements. IC Markets makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or any information supplied by any third-party.
ICMARKETS:US500Long
by ICmarkets
1
Super-cycle top in? I was considering that we had an extended wave 1 from march 2009 to feb 2020, the wave 2 bottom was march 2020, then wave 3 top was jan 2022, wave 4 bottom was oct 2022 and now we are on wave 5. This would be an extended wave 1 instead of wave 3 and that means wave 3 & 5 should be equal and with the current top that would put them within 1.1% of each other. This also fits with the alternating pattern with wave 2 being quick and simple and wave 4 being long and complex. Thoughts?
SP:SPXShort
by Sir_prized
1
S&P500: Vanna Snapback is Over – Short Gamma Drift Underway Belo📝 Summary Short gamma regime re-entered after 20Y auction shock. Below 5870, dealers face structural sell pressure from vanna + gamma + charm convergence. Wait for VIX to fall before buying any dip. 📊 Price Levels to Watch 🔺 Upside Breakout Trigger: 5885 → Reclaiming this level flips dealers back toward neutral gamma, opening short-covering squeeze potential toward 5925–5950 🔻 Downside Acceleration Zone: 5870 → Structural pressure zone. Vanna-driven delta hedging intensifies. Below here, the market enters a volatility expansion regime 🧱 Gamma Walls: Call Wall: 5950 Put Walls: 5875 / 5850 / 5800 🔍 Structural Regime Analysis Macro trigger: Last night’s 20Y Treasury auction was weak, triggering a sharp risk-off move. SPX broke 5935 → 5875 in 15 mins, entering short gamma zone (GEX 🔴🔴). Volatility Regime Shift: VIX spiked >20, breaking the downward vol trend that supported recent vanna snapback rallies. This marks the end of volatility compression. Vol expansion regime is in effect. Dealer Hedging Mechanics: Below 5870, Vanna pressure increases sharply as price declines + IV rises. Dealers short puts must delta hedge by selling ES, amplifying downside in a feedback loop. No Dip Buy Until Vol Stabilizes: VIX must fall or implied volatility flatten before any long bias resumes. Until then, treat rebounds as short entries, not long setups. ⚠️ Volatility Metrics Supporting This View GEX: 🔴🔴 (Negative Gamma on both 0DTE and aggregate expiries) IVx 5D Change: +4.04% → Implied volatility rising into the drop PUT$: 85.6% → Option flow heavily defensive (puts > calls) Skew: High, supporting demand for tail risk hedging 🧭 Tactical Strategy Short bias below 5870, scale-in entries on failed intraday bounce attempts First targets: 5850 → 5800 (Put gamma cluster + dealer momentum zone) Invalidate short above 5885 (where short gamma neutralizes) 📌 Final Note We are now inside a third-order Greeks-driven sell zone: Speed ↑, Color ↑, Ultima ↑ → this is a self-reinforcing volatility trap. No long setups are valid until structural vol metrics cool down.
CBOE:SPXShort
by mithril174
2
Wick Tricks at Highs Based on conventional wisdom the SPX monthly chart looks super bullish with the big wick. I want to explain how this can be misleading. For some "Creds" on the idea, I've attached a post made at almost exactly the low where I forecast the wick and spikes while stating this could be inside of a bearish setup. In the bearish setup, we'd often get bad news around this price. These candles can be bullish, of course - I don't think I need to insult your intelligence by explaining the bullish read on these candles. You know them. But did you know you also see one of these in almost every major top in history? I just posted almost every notable drop from 2008 to 1966. Here's a recent one. I could go and start posting examples from the 1910s, but I hope I've made my point. If it's a wick trap at a top, we generally will see a capitulation month within 3 months. Usually, it'd be next month with this month closing weak to make a wick on top.
SP:SPXShort
by holeyprofit
1
Plan for Full Support Failure We did really well today with lotto puts, hitting over 2,000% on the OTMs taking near the high of the day betting on new lows - but I want to start this post by stating nothing significant happened for bears today. I've been explaining recently how this sort of reaction to the level we were at would be most common. There are times when the low is made now. As I write this, we trade on support. In a 2021-esk move, we'd be at the low. In the statistically most common SPX move, we'd be in the first break the 5500. In the doom move, we'd be entering into a consistent downtrend that would have shallow bounces, a bigger trappier bounce around 5700 and then enter into a period of serious outright capitulation. The type of action almost never seen in indices. I believe contingent on the preceding action hitting this would be a highly probable event on the break. If we're in a big bear move then it HAS TO BE the case that the first drop was a leg one of Elliot downtrend or a leg A of a correction. This leg would have to be either the C leg or the 3 leg. Both of those would be capitulation events - and be headline making crashes. Like mainstream news sort of deals. These moves would be characterised by consistent and strong selling. Only shallow bounces. If these things are not happening, then it's not a good idea to be a bear. If these things are happening, trying to buy the dip might get you nailed. I'll tell you here and now, if the bear break thesis is correct - lots of people will end up margin called. They will buy the dip and then think they can average out of it buying more and there will not be deep enough rallies to accommodate this. They'll progressively pick up bigger and bigger positions. Hope and feel it's all over on the first major bounce and then the worst part of the trend will come. If the sell off is strong, people should respect the risk of it. To end on an optimistic note - if we make a low somewhere in the area we traded today that is almost always bullish. I'd certainly be bull bias to a new high and if we break the classic spike out risk I'd be ultra bullish. I strongly believe the trend for the following couple years will be set in this area. I think that's been foreseeable for years. If the downside risk can be overcome - I think the easy bull markets that followed would surpass the ones we've seen. Or this could become the worse sell off you've seen in SPX. It's not a time to be overly cocky. Protect risk and be ready to benefit from any outcome. Big money is likely to be available within the next 9 months. Next 3 if it's a bear thing.
SP:SPXShort
by holeyprofit
Spx500usd up? 1min chart at 23h London time?As it is , all I hope is that spx 500usd starts here at that blue line, after all, if it starts at the blue line the stock as might be up again, I'm not into the fundamentals by this time, I'm just making some Elliot and indicators-some mine, others don't, and trend analysis Hope u guys all in profit After all we all looking for the same Keep Ur trades safe And Do Always Your Own Research DAYOR Keep it safe This my my graph at 1min candles, returned to 15min chart Keep it safe. And keep cool.
OANDA:SPX500USDLong
by Carlosdrcunha
SPY pull back startAs we can see, it appears that today marked the beginning of a pullback, with the price breaking below the trendline and dropping by 1.20%. Interestingly, the price has now reached the 10 EMA, which often acts as dynamic support. From here, we need to remain patient — either waiting for a bullish reaction at this level or allowing the price to continue pulling back to a deeper point of interest (POI). Based on how the market reacts at each POI, we can then begin to take action on the trades from our watchlist.
ICMARKETS:US500
by GonzooTrading
SPX500 | Macro-Fib Confluence Levels + Risk Roadmap🕰️ Daily Chart | May 21, 2025 🏢 Posted by: Wavervanir_International_LLC After a sharp retracement and subsequent rally, the S&P 500 Index ( FOREXCOM:SPX500 ) is now facing overhead resistance near the 0.886 Fib retracement (~5,875-5,953) from the previous swing high. 🔍 Technical Overview: Confluence Resistance: 5,875–5,953 zone (0.886 Fib) Micro W-Pattern Setup: Pullback expected to 5,640–5,700 before a potential higher low sets up a breakout. Bull Targets: 6,182 (1.236 Fib ext) 6,512 (1.618 Fib ext, potential exhaustion zone) 🧠 Macro + Volatility Context: Monetary Policy: Fed remains data-dependent. July rate cut odds are increasing, but the market remains bifurcated between sticky services inflation and weakening real GDP prints. Bond Market: Yield curve remains inverted. A breakout above 6,182 will likely need bond volatility (MOVE index) to stabilize under 100. Global Flow Risks: Continued capital inflows into U.S. equities amid geopolitical hedging, but China liquidity injections and BOJ FX defense add noise. 🛡️ Risk Management Notes: Pullback Zone: 5,640–5,700 = high-conviction buy zone (0.5–0.618 retracement of last impulse) Invalidation: Daily close below 5,573 or breach of 5,475 = reassess long thesis. Position Sizing: Favor partial scaling-in with tight trailing stop until breakout confirmation. 📌 Strategy Summary: We are watching for a tactical pullback into the golden zone followed by a measured continuation toward 6,182+ if macro tailwinds align (i.e., dovish Fed tone + improving liquidity metrics). The setup mirrors late-cycle rallies and should be monitored alongside bond yields and dollar strength. ⚠️ Patience > Chase. Let the W structure play out. — 🔗 #SPX500 #Fibonacci #MacroTrading #Wavervanir #SMC #RiskManagement #TradingViewAnalysis
FOREXCOM:SPX500
by Wavervanir_International_LLC
S&P500: First Trade War indicates that ATH comes soon.S&P500 is a very healthy bullish levels on its 1D technical outlook (RSI = 65.213, MACD = 111.000, ADX = 49.249), being considerably over its 1D MA200, with the 1D RSI very close to the overbought zone. This resembles the first Trade War in 2018, when once the 1D MA200 was crossed, it became a Support level and extended the rally to the index Highs and the R1. We remain bullish on SPX with TP = 6,150. See how our prior idea has worked out: ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
CAPITALCOM:US500Short
by InvestingScope
$SPX Weekly – 2025 Trendline Bounce Confirmed Again📈 The S&P 500 ( VANTAGE:SP500 ) just bounced cleanly off the long-term trendline that has defined this bull market since the COVID low in 2020. 🟢 Touchpoints: March 2020 🦠 June 2022 (inflation bottom) October 2023 (Fed pause) Now again in 2025 That’s four successful tests in five years. Price action suggests that this trendline remains the key support for bulls — as long as it holds, the trend remains intact. But if it breaks in the future… buckle up.
VANTAGE:SP500
by SmartSignalss
Is a Range Forming?The S&P 500 has enjoyed a powerful rally in the last month, and now some traders may anticipate a sideways move. The first pattern on today’s chart is 5,971, the final weekly close of 2024. The index chopped on either side of that level a few times in January and early February. It stalled there in late February and early March as tariffs were confirmed on Mexico and Canada. SPX peaked just three points below that price on Monday before halting. Is the old resistance still in effect? Second, SPX made a lower low and a higher high that session. Tuesday was just the opposite. That combination of an outside candle, followed by an inside candle, may suggest a change of direction is coming. Third, Wilder’s Relative Strength Index (RSI) has turned down after nearing an overbought condition. If a pullback occurs, traders may eye roughly 5,773 as support. That was the low in January and a high in late March. Next, prices are historically far above the 50-day simple moving average (SMA). However, the SMA is turning upward. That could suggest the intermediate-term trend has grown more positive, which may keep pullbacks shallow. Finally, few important events appear to be scheduled before next Wednesday. (Minutes from the last Federal Reserve meeting and Nvidia earnings are both due then.) That lack of catalysts may also create drift – especially with a long holiday weekend approaching. Check out TradingView's The Leap competition sponsored by TradeStation. TradeStation has, for decades, advanced the trading industry, providing access to stocks, options and futures. If you're born to trade, we could be for you. See our Overview for more. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options or futures); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at www.TradeStation.com . Before trading any asset class, customers must read the relevant risk disclosure statements on www.TradeStation.com . System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors. Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission and a futures commission merchant licensed with the Commodity Futures Trading Commission). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association, and a number of exchanges. TradeStation Securities, Inc. and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., both operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit www.TradeStation.com for further important information explaining what this means.
SP:SPX
by TradeStation
S&P500 Same recovery path with 2020 and 2009The S&P500 index (SPX) has recovered almost 90% of its losses since the February 19 2025 All Time High (ATH) and many have already started calling for a technical correction. If we compare however this 2025 Tariff fueled correction with the recent most aggressive ones (COVID crash in 2020 and Housing Crisis 2008/2009) we see a different picture. On their respective 0.9 Fibonacci levels (close to which we are today), both of those market recoveries went straight to new ATHs, without testing their MA50 (blue trend-line) until the next Cycle peak. They had that tested before when the price was trading near (or on)the 0.618 Fib. Notice also how a MACD Bullish on all three charts, confirmed the aggressive recovery pattern straight after the bottom. Instead of a correction, history shows that we might be looking at new ATH soon. ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! This is best way to keep it relevant, support us, keep the content here free and allow the idea to reach as many people as possible. ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
TVC:SPXLong
by TradingShot
05/20/25 Trade Journal, and Where is the Stock Market going tomoEOD accountability report: +293.75 Sleep: 4.5 hours , Overall health: Calm and tired. need to catch up on sleep. What was my initial plan? Market structure was bearish so, I started the day shorting, but once market flipped bullish, I switched to BTD mode. Daily Trade recap based on VX Algo System — 9:00 AM Market Structure flipped bearish on VX Algo X3! — 10:20 AM VXAlgo NQ X1 Buy Signal — 11:18 AM Market Structure flipped bullish on VX Algo X3! — 12:30 PM Market Structure flipped bearish on VX Algo X3! — 1:20 PM VXAlgo NQ X1 Sell Signal — 3:13 PM VXAlgo ES X1 Buy signal 2x signal (C+ set up) Next day plan--> Above 5900 = Bullish, if we lose 48min support at 5900--> 5800 next Video Recaps -->https://www.tradingview.com/u/WallSt007/#published-charts
SP:SPX
by WallSt007
The Three Main Things That Happen at 86 Fibs.As some of you may know, I have a bit of an interest in how trend moves have historically formed and failed. I am interested in the subject generally, with me having put a fair amount of time into just understanding the basic timeline of historic events, reading the different studies on market hypothesis' and checking how these perform or fail in the fat tail events, but when it comes to trading I have a few main interests. --How can we approximate what zone a top would generally come if we're topping. --How do we survive being early on that. --How do we know it's wrong and we should flip long. --The typical break/capitulation level for bear trends. --Where we tend to bull trap from. --Styles bull traps and market recoveries. --How markets generally bottom after extreme events. The answer all of those questions is an optimistic endeavour but these are the main things you have to understand to make it viable to be able to bet on the major turning points in these fat tail events and to be able to take exposure without going broke if you get it wrong. Be that trying to buy lows or fade highs. During the last bear move we posted short analysis at the top, throughout and then posted the different possible bull traps while we were at the low. To this point, the general norms of the historic analysis have held up. Now, we're into the 86 fib which has tended to be a critical area for the trend decision. In this piece I'm going to go through the main types of reactions we get here and how one can aim to make a plan that will be profitable in all types of scenarios. Many of the things I'll be discussing are generic retracement rules and if you follow my work you'll know them from my 76/86 theories that I discuss regularly, but all of what I am about to cover here also checks out on the SPX chart. I have manually went through every single drop of over 10% in the SPX and then modelled the different rallies from there. Be them recoveries or crashes - these rules tended to be useful in most of them. Let me start by giving a very brief history of my use of the 76/86 fibs. The original rules I had for this was a reversal should come just a little bit before the 76 fib. I'd buy/sell close to the 76 fib and use a 76 hit as my stop loss. These were great times. It would work a lot and it'd pay over 1:10 RR sometimes when it did. Over time this became a little harder and I had to increase my tolerance zone for spikes above the 76. My rules then became to trade close to the 76 and if the 86 hit then I'd stop out because I think it'll go higher. Most of the time we pullback first, but the 86 hitting I used to class as a failure of the reversal. This worked well (Albeit with reduced RR) for a long time but during the 2022 bear market this theory has significant failures with us tending to trade to the 86 and then put in full reversals. Given my bias is trade the reversal on the 76 and expect continuation if the 86 hits, this was a problem. My default rules would pick up losing signals on both sides. So I had make some further amendments to the idea in 2022. I've used the general idea for about a decade in total now, with some minor adjustments along the way. This framing is important because the general default rule I'd have here is now we 86 has hit we probably pullback a bit but it's a net bull bias- however, that strategy has weakened and I have to be a bit more agnostic now. Before, by this point I only have bull plans and ideas of how to stop out if I am wrong. With the new tendency for 86 hits, I need a bear plan also. First we'll deal with the outcome that I find happens least often, the clean 86 break. I hate this move. Be it on the upside or the downside I always find it easer to make money when something happens at the 86. I don't even care what. When it trends through I don't expect it because it only happens about 20% of the time and I can end up in a tricky situation where the market jumps from one resistance level to the next and I never want to buy and generally am bias towards fading the move - which can go really bad if the reversal thesis is wrong. When this clean break is made it's usually built in a trending way. Higher lows in an uptrend. I've found the best way to deal with this risk is if there's any credible risk of the 86 breaking I start to buy all the dips when they're at deep retracement levels. What I "Think" will happen doesn't matter. I know if we head into the type of break I dislike I'll do poorly if I do not start to fade the 86 early. I'd rather lose one or two small trades trying this than end up in a situation where I find it hard to know what to do for months. If we get back above the 86, this is the plan. Just buy all the dips until it fails. If it fails early I'll probably lose 2-3% over a few trades. If one trade works and I lose after I'll end up even. If they all work I'll end up with over 30% for my 3% risk. Although I do not "Think" this move is likely, when you can risk 3% to make 30% and cover yourself from the things that are tough to deal with - that's a good deal. The most typical result in SPX history (and in general 86 theory) is we make a crash like move off it but this only goes to the 50 fib. Very common. You'll find this in SPX recoveries from as early as 1920. Obvious ones after the 2008 crash etc. This is a net super bullish setup but we'd be in for a drop of about 10% first. It's the most common outcome and if it was not for the need to edit rules due to stop hunting this would be the only main plan I had right now. The plan would be to trade this and everything else would be planning how to not lose too much if something else happened. If the 5o fib breaks, we tend to capitulate to the 23 fib. From here is a bit of a tricky spot because a lot of different types of things can happen but inside the context of the overall move we have, this could foreshadow a massive break. If and when we get there I'll discuss more about the tactical trading decisions one can make in this area. I think for the bear thesis to have a chance we need to the monthly candle to close with a wick on the top. A drop of several 100 points into the end of the month. Giving the size and speed I'd expect this move to be, it'd almost certainly be a news related move. If that marker hits, then we'll discuss the decisions to be made into the support levels. If we uptrend above the 86, then it's buy all dips until it stops working, review after. But one thing is for sure, this is historically the riskiest spot to be short term bullish. Even in a bull setup, you're wrong 3/4 times on long entries here. In a bear setup, things get really nasty. Bulls should be super careful if the 86 can not break. Bears should be careful if it does. The historical analysis clearly shows if you make mistakes here on either side you can take crippling losses. No one should be overconfident at these prices (most people are though). The bears have the edge for the next 10% under the 86 but if they are wrong there are so many different ways it can end up terribly. Bulls are at the point where they should be most careful, but as it generally is - this is when they feel bulletproof. Interesting spot. For my part, I plan for everything and trade what happens. Being profitable is more important than making bold and clever predictions if you do this for a living.
SP:SPX
by holeyprofit