One of the biggest pitfalls that new traders face is wanting to try to trade beyond their abilities. I know this because that is exactly what I did. I started out trading in the early nineties as a trend follower and did very well. I thought I was better than that and when internet trading began I started to chase the latest story of the stock that was going to be a 10 bagger in various chat rooms. I soon learned the hard way that I was getting chopped to pieces and that if I had stuck to trend following I would have been far in front. With my stock trading that I do now, I am only interested in trending setups. I have my other instruments to add diversity such as forex, commodities, bonds, market indices etc. I have always got something to trade. All you need to trade the trending setups is the monthly, weekly and daily time frames. There is no point trying to trade ranging stocks with the type of longer term trading that I do. If I want excitement or entertainment I go and look for it elsewhere.
This is a classic example of a strong trending stock. RHC listed on the ASX. I trade both ASX and U.S. stocks. This stock is currently in a range so I have no position at this time.
Click on the chart to enlarge
RHC mth chart
RHC weekly chart
RHC daily chart
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