Would you cast off the lines before checking for foul weather? How about leaving port without a radio check? Ever been at sea without a storm anchor? Would you enter the harbor without checking the tide? Only if you’re an Oscar.
To navigate the sea of emotion and fear in the markets, you must be able to asses the waves, weather and readiness of the ship. All in conjunction with one another.
Some refer to this as “stacking confluence:”
- Market Condition: check charts, avoid indecision and choppy waters.
- Market Phase: enter when the tide pulls back.
- S/R: go long from support lines & short off resistance lines.
- Indicators: If you use a compass, understand its underlying principle.
- Price Patterns: Look for one of the primary price patterns.
- Candlestick Patterns: keep an eye out for deceleration in price.
Any less than four given factors and I tie-off to starboard, sails down.