By The Disciplined Trader
I remain flat as I watch the changeable markets evolve daily. This trading environment can be brutal for capital preservation if discipline and self-control are recklessly dismissed. So with that in mind I have been using extreme caution and patience to maintain my financial staying power.
The markets hit an oversold level last week that didn’t quite trigger a buy signal, so unfortunately I missed the move up this week. This rally has been strong from the lows with bullish talk of rumoured stimulus and interest rate cuts in China fuelling the fire. This has left me feeling uncertain of the next direction - although the underlying bearish drag of the unresolved European debt crisis is far from over yet.
I have heard many analysts describe this move from the lows as a ‘dead cat bounce,’ where the rally will eventually run out of steam and sink to new lows. If this is the case then capital preservation must remain my priority so I’m ready for potential opportunities at much lower levels. In the meantime I wait and watch for clues as the markets continue along this path of uncertainty and imbalance.
The Disciplined Trader is an average guy who has little fundamental knowledge of the financial markets, yet he consistently makes money trading. He simply applies the basic rules of trading discussed in bettertrader.co.uk and executes his trading techniques applying great discipline.