Always Wait for a Signal

You may have your own personal opinions and beliefs on where a stick is likely to head, but before you pull the trigger and make the trade make sure that you actually have a technical signal on the position. Waiting will help you in many ways.nn1. Stocks do not care about your opinionsnnStocks do not care about what you believe will happen. They do not believe on how logical your belief is or how much sense it makes. In the end a stock will always do what it is going to ndo, weather that be trending up, down, or sideways. nnIf the technical signals you are getting do not match what you believe will happen with a company, it is better to go with the technicals.nn2. Signals are ProvennnSignals such as breakouts, bounces off of support and resistance, and trends are proven to be profitable. Your thoughts about what will happen in the market are not. It is hard to back test your fundamental beliefs about a company. nnOn the other hand it is much easier to back test technical signals and see what would have happened had you followed strict rules for trading in the past. nn3. What Common SensennIn the short term the stock market is controlled by emotions. People do not think rationally, they are thinking “how can I turn my money into a lot more money.” Because of this things like trends and breakout are very likely to occur even when they argue with fundamental data. nnI’m not saying that fundamental analysis is a bad thing, but unless you are willing to hold your position for a long time I wouldn’t make it the base of your trading. nnFor some stock tips visit http://www.stocks-simplified.com/stock_tips.html nnFor more on technical analysis visit http://www.stocks-simplified.com/technical_analysis.html n