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We've just released a complete revamp of Week 2 (contains the most up-to-date content plus a new design as well!). How exciting! Learn more on Price Action, X-mode, and more, it's just a button away.

P.S. the videos are really good 😉

For traders too young to have seen 2008 crash, last week was the biggest market drop for the stock market since the financial crises and this time it dropped faster.

“The idea that markets are always rational, that they perfectly reflect all knowable information and always produce in some sense the ‘right’ price”. This theory still has a grip on Western economic thinking, despite much evidence that it is wrong.

“It treats economics like a physical science when, in fact, it is a human or social science. Humans are prone to unpredictable behaviour, to overreaction or slumbering inaction, to mania and panic.”

I spent this weekend reviewing data from last week.

Yes, we did see a lot of extremes, but comparing it to the fact that we just went through the first leg of a financial meltdown we did very well!

Have faith traders and read on:

Breakfree Trading Algorithm 3.1.5 has been released on 7th March 2020.

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+ Improved algorithm engine
+ Fixed UI issues with entry and TP boxes
+ Stoploss UI updated
+ Minor bugs fixes

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To update to the latest version please do the following:

1) Remove the current algorithm by clicking X, when you hover over the Breakfree Trading Algorithm in the top left corner of your TradingView chart.

2) Close and reopen TradingView chart (very important)

3) Go to indicators and add the Algorithm again.

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FREE MONEY

Stockmarkets today.

Italy: -10%
Norway: -8.9%
Spain: -7.5%
France: -7.2%
Germany: -7.1%
Netherlands: -7.1%
Saudi: -7.2%
UK: -6.8%
Australia: -6.6%
Indonesia: -6.6%
Sweden: -6%
South Africa: -5.5%
India: -5.4%
Japan: -5%
Turkey: -4.2%
South Korea: -4.2%
China: -3%

Like a powerful river, volatility can be harnessed, directed, and used as a tool to build wealth.

Ten ways to be a trader, not a gambler:

1. Trade based on the probabilities NOT the potential profits.
2. Trade small position sizes based on your account NEVER put your whole account at risk of ruin.
3. Trade a plan NOT emotions.
4. Always enter a trade with an edge that can be defined DO NOT trade with entries that are only opinions.
5. Trade based on quantifiable facts NOT opinions.
6. Trade after extensive research on what works and what does not. Don’t trade in ignorance.
7. Trade with the correct position sizing since risk management is your number one priority and profits are secondary concern.
8. Trade in a way that eliminates any chance of financial ruin NOT to get rich quick.
9. Trade with discipline and focus DO NOT change the way you trade suddenly due to winning or losing streaks.
10. Trade in the present moment and DO NOT get biased due to old wins or losses.

The question is what side of the market are you operating on? Are you with the majority who gamble and lose their money or are you with the minority acting as the casino picking up the profits that the gamblers consistently lose?

Volatile markets will produce huge profits for traders in the coming months.

There has never been a better time to use Breakfree Trading to compound and multiply your savings.

With the virus 🦠 running rampant Outside, no one really knows how much longer we will have to stay inside our homes 🔒

Weeks, maybe months.

Use this time wisely to protect and multiply your wealth.

Grab discounted multi-month Breakfree Trading plan before we take it down.
https://www.breakfreetrading.com/LP2-trading-algorithm

In trading, a ‘Bull Trap’ is considered a rally in price that creates a false momentum signal to go long because the downtrend looks like it is over and reversing back to an uptrend in price but it is a false signal and the market returns to a downtrend trapping longs who then need to sell to get out at a loss.

It is called a trap because the bullish signal causes traders to enter because they think the downtrend is over, but it is not and they are then trapped in a long position that went against them quickly.

Other traders get caught in a bull trap simply because they have a fear of missing out on a new uptrend so they buy the first rally too early.

Bull traps look very convincing in real time as the potential end of a current downtrend. Bull traps can also be called a ‘Whip Saw’ due to the speed of them moving up and then quickly back down against the buyer.

1. A bull trap is a strong enough price reversal during a downtrend to lure in buyers that end up on the wrong side of long term price action and then experience unexpected losses as they hold their positions or stop out.

2. Bull traps happen when more buyers don’t follow through on the upswing to support the rally and price breaks back down lower.
Traders have better probabilities of avoiding most bull traps by waiting for an additional confirmation signal and follow through after a
reversal, gap up, or breakout or with a confluence of other technical signals.

3. A bear trap is the opposite of a bull trap when short sellers are trapped at lower prices and the trend reverses quickly back up.
Bull traps usually occur during bear markets, earnings announcements, or news events when moves to the upside are short lived on a chart.

The Walgreens chart is an example of a Bull Trap on rallies back to the 200 simple moving average before resuming the trend downwards.

Gain complete X-ray vision into the market. Updated in real-time. https://www.breakfreetrading.com/LP2-trading-algorithm

All the value in life, including in relationships, comes from compound interest.

“Pain+Reflection=Progress”
- Ray Dalio

A Dead Cat Bounce Explained

In the financial markets a dead cat bounce is a small, brief rebound in the price of a stock, commodity, or currency that is in a long term downtrend. The mechanics of a dead cat bounce is that it stops going lower and puts in a short term low in price and then surges higher for a few days but this fails to continue to the upside and then resumes the downtrend and sets a new low in price in the chart timeframe being observed and then continues to go lower.

A ‘dead cat bounce’ can be triggered by a enough buyers rushing in too early to drive up the price, short sellers buying back their positions on the first sharp move lower creating buying pressure and a short squeeze as they lock in profits, or a lack of sellers willing to exit at the first low prices after the quick decline. These scenarios are all short term before the buying pressure is absorbed and the selling pressure resumes.

This metaphor originated from the idea that “even a dead cat will bounce if it falls from a great height”. This saying on Wall Street is used a lot in any situation when any business, market, or person has a brief resurgence during or following a severe decline in success or popularity.

A ‘dead cat bounce” is a short term temporary small upswing in price inside of a bigger long term downtrend in price.

Broke Trader vs Rich Trader

In a Monopoly game, if there are ten people playing, one person is likely to take everyone else’s money.
Trading functions much the same way, with 10% of traders becoming profitable, while the other 90% lose or break even.

Here are the 18 habits of Rich Traders. Ignore them at your own peril.

Psychology
Broke Traders are greedy and have unrealistic expectations. Rich Traders are realistic about their returns.
Broke Traders make the wrong decisions due to stress. Rich Traders can manage stress.
Broke Traders are impatient and look for constant action. Rich Traders are patient.
Broke Traders trade because they are influenced by emotion. Rich Traders use a trading plan.
Broke Traders think they can stop learning. Rich Traders never stop learning about the market.

Risk
Broke Traders act like gamblers. Rich Traders operate like a businessperson.
Broke Traders bet the farm. Rich Traders carefully control trading size.
For Broke Traders outsized profits are the #1 priority. Rich Traders know that managing risk is the #1 Priority.
Broke Traders try to prove they are right. Rich Traders admit when they are wrong.
Broke Traders give back profits by not having an exit strategy. Rich Traders lock in profits while they are there.

Methodology
Broke Traders give up. Rich Traders persevere until they are successful.
Broke Traders hop from system to system when they lose. Rich Traders stick with a winning system even when it is losing.
Broke Traders place trades based on opinions. Rich Traders place trades based on probabilities.
Broke Traders try to predict. Rich Traders follow what the market is telling them.
Broke Traders trade against the trend. Rich Traders follow the market trends.
Broke Traders follow their emotions to their disadvantage. Rich Traders follow systems that give them an advantage.
Broke Traders do not know when to cut losses or lock in gains. Rich Traders have an exit plan.
Broke Traders cut profits short and let losses run. Rich Traders let profits run and cut losses short.

This pandemic will not be like 1918 when 50 million people died, this time we will have 50 million unemployed. Not a bad trade.

Need stock trading ideas? Check out this free tool

https://stockrow.com/screener/