Stop Trying to Predict Stocks

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“What if i bought Amazon and held when it was a dollar? I would be a billionaire.”

We are all millionaires and billionaires in hindsight. It all sounds so simple when we look back at it. But in reality, in the moment, it almost never works out that way we make it sound.

How much of us look back at a daily chart and see a stock we missed out and say,

“Aww man, if I put X amount of shares at dead bottom, and sold right at the top, I would have killed it”

This type of thinking is not necessarily bad. It helps you see the possible potential in some of stocks we play. But there is a downside to thinking like this as well..

TRYING TO PREDICT STOCKS

When we constantly see plays we missed it can create F.O.M.O (Fear OF Missing Out)

Since all these perfect scenarios are playing through our minds, it far too often leads to us pulling the trigger too fast on the next “opportunity”

We think, “Ok , this is gonna be the big one”, and before you know it..

The stock is tanking on you, you sized in too big, no news, no volume..

Anything can happen when you are too eager to find the next stock. I always preach the importance of getting early. However, that’s after you do your research and the stock meets your criteria of type of stocks you trade.

SOLUTION? FOCUS ON REACTING RATHER THAN PREDICTING.

This is what most of the best traders do. When you react instead of predict,

You are allowing for confirmation to take place and then quickly hopping on for the easy ride, instead of trying to anticipate it and letting that “ride” take you somewhere you don’t want to go.

You don’t want to be the trader that sees positive news and starts buying instantly. To some people they ask why would you not do that? Its positive news. Its because..

Not all good news influences the stock to go up, and not all bad news influences the stock to go down.

The news that comes out could sound soo sweet to the point where you think “There is no way this doesn’t go up.” But what controls the stock price at the end of the day?

News…? or Buyers and Sellers?

News and catalysts mean nothing unless the traders trading it view the news and worth buying or selling more. Once you as a trader understand that concept,

It will be very hard to continue attempting to predict stocks.

But will be easier to lock in profits after reacting. Good luck.

 

 

 

 

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