3 Top Trading Tips For Staying Safe In This Market Correction

Source: economictimes.com

With the stock market clearly in correction mode, it can be difficult for traders who have been suddenly forced to adjust–especially after several months of steadily higher prices.

Here’s our best trading tips and some examples to help you successfully navigate the storm.

The profitable, bullish trade setups that worked a few months ago will not work right now.

As such, it is crucial for trend traders and investors to remain patient and disciplined until market conditions become favorable again.

With the model portfolio of our Wagner Daily report still in 100% cash since the market started falling apart, our subscribers have been benefiting from patiently sitting on the sidelines this month–protecting previously earned profits from the bull market.

Now, we are stalking a new, potential short sale setup in a formerly leading stock that is rallying into resistance and stalling…but still avoiding new buy entries.

That’s the beauty of a trend trading system–you can profit from both up and down markets (while sitting out indecisive markets).

3 Top Tips for Trend Traders Now

Below are three hot trading tips to help keep you on the right track in this volatile stock market. The three charts that follow drive these points home:

  1. Don’t be a Hero – With the allure of a big win and looking like a genius, it can be extremely tempting to pick a bottom when stocks are getting whacked–but don’t do it!

    Doing so usually requires several attempts, at which point traders usually lick their wounds and give up…only to watch the market rip higher the next day!

    Has that ever happened to you?

    If so, you are probably trying to be a “bottom picking hero” and should immediately change your mindset.

  2. Avoid the Fear of Missing Out – Do not give in to the natural human “fear of missing out” by chasing price action.

    When stocks try to reverse off their lows in a market correction, the bounces that can be sharp and sudden–often aided by institutional short covering.

    It can be difficult to watch your favorite stock zoom higher without you in it, but it’s better than buying near the top of a bounce, only to watch the price dive back down.

    Remember, what works in a bullish market usually does not in a bearish market!

  3. Pre-define Your Risk – Every trader and investor should always have some sort of rule-based system to manage risk before putting money to work in the market.

    If you don’t already have them, now is the perfect time to create trading rules that dictate when and what you will buy, and how much.

    Be realistic about risk by setting in stone the maximum dollar amount you are willing to risk on each trade–which probably should be less than you would be risking in a bull market (unless you’re selling short).

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Disclaimer: Past results are not necessarily indicative of future results. There is a high degree of risk for substantial losses in trading securities. All data and material on this website and/or ...

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