NEW YORK ( TheGoldAndOilGuy.com) -- Trading with the trend should be your main focus for long-term success no matter what type of trader you are ( options trader, stock trader or ETF trader), although it's not as easy as it sounds.
The good news is there is a simple trading model that removes 95% of trading analysis and greatly reduces trading-related emotions because the key technical analysis rules based on one of the world's best chart technician's (John Murphy) technical analysis methods have been applied to the chart automatically. The key is to identify the trend of the market. Once that is known you can focus on trading strategies that take advantage of the current trend.
Over the past few years I have been creating this indicator/chart layout tool that converts my chart reading experience, tips and tricks into a simple system removing analysis paralysis, which causes most individuals to second-guess what they see and don't pull the trigger. Using too many indicators or read/listening to several other traders commentaries with different views than you causes this paralysis.
My simple red light-green light model clearly shows a viewer the current trend and expected price range (high and low) looking forward a couple days. I use a series of data points such as volatility, volume, cycles, momentum, chart patterns and logic rules. It even shows extreme pivot points helping you find low-risk entry prices for both bull and bear market conditions.Recent Trends and Signals for the S&P 500 Index Daily Chart: Trading With the Trend -- Sweet Spots Knowing the direction of the market is simple using the chart system above but trading with the trend is not that simple because of natural human behavior. Instead traders fall victim to trying to pick a top or bottom because they think the price is overbought or oversold and they want to catch the next big trend change. We all know the saying "the market climbs a wall of worry." Well, the biggest worry most traders have is buying long in a bull market because stocks and price always look overbought and ready to top each week... This leads to people trying to get fancy picking a top only to get their head handed to them a few days or weeks later depending on how stubborn they are to exit a losing position.
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