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Price Action Is All That Counts - Part 2

price actionLast week we looked at what can influence price action , specifically zones of historical support and resistance across various time frames. We also discussed moving averages as a form of dynamic support and resistance.

This week we'll look at the basic definitions of price action. This may seem simplistic yet you'd be shocked how often traders attempt to trade the wrong type of price action.

Here at The Chartist we're big proponents of Elliott Wave Theory, to our minds the best and earliest identifier of trends.

In our Chart Research services we often discuss impulsive and corrective price action.

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Price Action Is All That Counts - Part 1

price actionI've always been an advocate of price action being my leading indicator.

Those charts you see with the fancy lines and indicators can look impressive.

And they do make you feel as though the person who constructed them knows what they are doing.

We have a tendency to be impressed when something looks complicated.

Yet does complexity make you a better, more profitable trader?

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Mean Reversion Systems

Nick Radge 2018The following article is an excerpt from the Trading System Mentor Course.

Unbeknownst to most, the world's greatest investor, Warren Buffett, is actually a mean reversion investor. He buys companies well below their respective 'fair value' then waits for them to return to that valuation or higher. He will tend to only sell a company if it's price rises well above it's value. Unfortunately two issues arise. Firstly, 99.5% of the population will not wait 10-years for a company to turn around and revert to its fair value. And secondly, he bases his decisions on pure fundamentals and copious amounts of discretionary input.

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Why Take The Risk?

protective stopOne of my favourite trading mantras...

'I will place a protective stop without fail every time a trade triggers'

The reason is simple.

No one knows what markets are going to do from one day to the next.

Not you.

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It's More Important To Play A Good Defense

Its More Important To Play A Good DefenseIn my 34 years of trading I've never met anyone that didn't like to make profits.

Yet, for some strange reason, there seems to be an overwhelming number who hate losses.

Go figure.

Unless you've been sucked into a Ponzi scheme, you can't have one without the other.

They come hand in hand.

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Tips Toward A Prosperous 2019

Tips Toward A Prosperous 2019Many new traders believe there is a Holy Grail. A magic indicator. A rock solid metric. A particular setup. Some think there is a secret.

Letting go of this mindset is very difficult.

New traders go from newsletter to newsletter, forum to forum, expert to expert.

Looking for that guaranteed system that will set them up for life.

Yet there is no such system.

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Don't Fight It!

dont fight itThe trend has been up in the U.S ever since the 2009 low.

During this period of time it was rare to hear anyone suggest shorting the market. Price action was smooth, impulsive and strong.

Why would you contemplate fighting it?

The question now; are we are entering a new bear market phase?

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Australia GFC 2.0?

all ordinaries accumulation indexThe Australian economy is continuing to show signs of vulnerability and evidence of a nasty credit crunch are emerging; growth is down, investment is down, wages growth is down and consumption growth is down.

Households are not spending. They're tapped out and under pressure as house prices fall. For the last 20-years the RBA has relied on household debt to meet their inflation targets, but with debt levels at record highs, house prices falling and the big banks are continuing to dampen lending, the RBA is at a crossroads.

The recent Q3 GDP data printed at 0.3% vs the expected 0.6% was a significant shock to economists sending many to suggest the RBA will need to lower interest rates - not tighten as many has expected. 

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The Long And Short Of It

forexWhen markets start to sell off, the common questions is "Should we be shorting?"

Fact is, bearish markets are different from bullish.

Shorting is definitely harder than it looks.

Downtrends are difficult to ride. They have swift counter trend moves which often knock out trailing stops.

The largest profit can be 100%, yet only if the stock goes to zero.

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The 10-Month Timing Model

signal chartIn late 2008, early 2009, I was approached by various financial planning firms and some stock brokers.

Their 'buy and hold / can't time the market' business model was crashing and burning alongside global stock markets.

It's a hard sell to tell a client to 'stay the course' when their portfolio of safe-as-houses property trusts with nice yields is 50% in the hole.

What they wanted was a strategy that was simple to implement, made market returns, without the large downside.

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