Regardless of the common wisdom about shorting new highs, I still think that is a bull market philosophy, predicated exclusively on the fact that there is great BUYER momentum and not the simple fact that there is alot of COVERING momentum... So many of the once tried and tested rules that seemed like gems of advice 3-4 years ago can just be thrown out the window...This market is sell into rallies, buy into multi-day breakouts lower...Regardless of what we all think is correct or proper or the RIGHT thing to do...The reason why everyone wanted to sell yesterday is because we have seen for more than 4 months now that every extended one day rally gets reversed...And that the very best entries have occurred, IN THE PAST, near the close of the one day rally, when everyone has shorted all day long and then decides not to carry a losing position overnight or over the weekend...But the difference between this price action in a BEAR market and this price action in a BULL market is that the people forcing the market higher are the unwilling victims as opposed to the active participants...I think that is kinda what separates the bear market from the bull market anyway, it is just a constant series of exploiting those people on the wrong side of the trade over and over again...
There is nothing gained by not taking the risks individually and seeing how you react given any number of outcomes to one trade or a series of trades...It takes a long time to find your own "footprint" in the markets because you really do not who you want to be or who you are as a trader... I think the analogy to golf is a very good one, and one that I am familiar with because I spent so many years practicing, competing at it, etc...I also came across so many golfers who seemed to always flip thru Golf Digest and try and figure out the "perfect swing"...You see the search for perfection is not just something indigenous to trading, it is something all novices seek out...They think they can watch a pro tournament and if they can just emulate that guys movement they can somehow become just as proficient...But then people forget about Paul Azinger, Hubert Green, Lee Trevino, Arnold Palmer...All guys with distinctly different swings, swings that are "wrong" according to all the "experts", but swings that nonetheless have produced enormous success... I think that one of the most dangerous times a trader has is in the "in between" stages...Once the trading bug bites you, you are constantly in search of something that is perfect...And you are very impressionable...There are threads on this forum that have some of the more basic concepts and you can just see people fawning over these ideas, so enamored with the concepts, that they think they have found nirvana...And once they have that first losing trade or that second losing trade, they will scrap those ideas and go searching again...That is what is most dangerous... If I were to start all over again from scratch and erase my mind, I would probably want someone to say to me...For one month you will trade this specific time frame and you will trade this specific pattern and you will not diverge from this specific set-up even once...Because over that month I would see the balance of winners to losers and I would not be swayed by a very small sample of trades...I would develop a consistency and an eye for that specific situation and over time I would become an expert on one specific time frame, one specific scenario and I would no longer be "searching" for something new... Its good to seek out others assistance...Its especially good to find people who really know what they are doing and understand exactly how the market works as a whole...The basics of price action, the phases of trending, congestion, volatility, etc, etc...But without a basic understanding of price action, it is very difficult to make any progress forward..Kind of like the golf swing..You need to learn the proper grip, allignment, weight transfer, etc ,etc before you can attempt to work the ball...It all begins with the fundamentals and then grows from there...