The stock market is a great equalizer.
There will always be some traders with more capital, more resources, and more information than others… But the truth is, nobody really knows what’s going to happen next.
Millions of dollars change hands every day as traders try to predict the future. But ultimately all any of us can do is weigh the probabilities, assess the risks and the potential rewards, and take a leap into the unknown.
So whether you’re trading with $500, $5,000, or $5,000,000, I promise you that we all have that same feeling right before we put on a trade. It’s a mix of adrenaline and dread, all wrapped in one. Fear and greed are two sides of the same coin.
Back on December 8, I outlined how one of the best defenses against your emotions is a well-defined trading plan.
In today’s issue of Market Minute, we’re going to explore this concept further.
The Key to a Great Trading Plan
Your trading plan should be objectively definable.
That means it should cover every aspect of your decision-making process in detail… From figuring out which market you want to trade, how big your position will be, when you’ll make the trade, and how you’ll exit the trade for either a profit or a loss.
To determine if your trading plan is objectively definable, try giving it to a friend. If they think they’d be able to successfully place trades based solely on your plan, then you’ve met this all-important criterion.
As you can imagine, it takes a lot of time and hard work to craft a viable trading plan.
And of course, there’s no guarantee that for all your best efforts your trading plan will succeed in live market conditions. By the time you’ve finished developing your plan, the market may have shifted. As a result, what worked a few months ago when testing your strategy might be utterly useless today.
Free Trading Resources
Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career – at zero cost to you. Just click here to check it out.
Ultimately, a winning strategy has a lot to do with pattern recognition. Traders of all stripes – fundamental analysts, technical traders, and quantitative types – all look for patterns.
Specifically, they look for past evidence that suggests when “X” occurs, “Y” is likely to happen.
But it takes a certain amount of knowledge, not to mention experience, to know what kinds of patterns to look for and which ones are most likely to yield consistent success.
If you choose to go down this road on your own, know that it’s difficult. It will be frustrating and time-consuming… but can be incredibly rewarding if you figure it out.
There is, however, one exceptionally effective shortcut that can yield the profitable results all investors look for while eliminating most of the frustrations that go into developing your trading plan…
That shortcut is to find an experienced trader with an established track record.
Unfortunately, such individuals are rare and hard to find. And even if you do find them, there’s no guarantee that they would be willing to share their knowledge and experience with you.
This is what makes Jeff Clark such a unique person within the trading world. I’ve never seen anyone as transparent and open as Jeff is about both their track record and their trading strategy.
While many traders out there are more than happy to talk about the big wins, Jeff is equally comfortable taking ownership of losing trades as well.
That’s because he understands that there’s a difference between losing a trade and being a losing trader.
He knows that there’s an element of risk every time you take a trade. If you want big wins in this game, you must be willing to miss a few of the shots you do take.
So long as those losses are controlled, you can stay in the game to trade another day.
In addition to understanding how to manage risk, Jeff also has a systematic way of analyzing markets. He has an almost supernatural knack for timing short-term market swings.
And in the time I’ve gotten to know more about his trading style, I’ve been able to add a few of his handy tricks to my own toolbox.
In short – he has an objectively definable trading plan. One that has served him and his clients exceedingly well over a long career as a trader.
As 2021 draws to a close, I’m very excited to see what next year holds for all of us.
There are certainly some big questions about how the markets will perform in the months ahead.
Based on my years of experience successfully trading the markets, my hunch is that volatility isn’t going anywhere. Nimble and agile traders are in for some incredible money-making opportunities.
If you’d like to take advantage of them and take your own trading to the next level, then I look forward to seeing you on the Jeff Clark team in 2022.
Analyst, Market Minute
In today’s mailbag, Market Minute subscriber Juan writes in about Jeff’s recent essay on the “crystal ball”…
Great job with the crystal ball analysis!
Thank you, as always, for your thoughtful comments. We look forward to reading them every day. Keep them coming at [email protected].