Being a contrarian is a trait almost every successful trader shares.
If you want to consistently get into good trades, you have to be willing to buy when others are selling.
And on the other hand, you have to be willing to sell when others are buying.
The problem is… being a contrarian is easy.
Being a contrarian at the right time is really difficult.
A Harsh Truth
As traders, timing is important. I’m not talking about selling the very top or buying the exact bottom.
When I say timing is important, it means that we have to accept a harsh truth when it comes to trading.
That truth is, if you want to trade the biggest winners, by definition you have to get into the trade a little bit early.
The best trades are the ones most people haven’t yet bought or sold.
If everyone thinks a stock is going to go shooting up, there’ll be a rush to buy it. By the time you get your chance to buy the stock, it might be too late.
The stock could have already made its big move… leaving you holding the bag as everyone else takes their profits.
But most traders struggle with being early to a trade. They want immediate gratification. If the trade doesn’t start going their way right away, they start getting frustrated.
This can lead to a trader exiting a great position at the wrong time.
Free Trading Resources
Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career – at zero cost to you. Just click here to check it out.
Plan Your Trade, and Trade Your Plan
Have you ever gotten out of a trade after a few days where the market hasn’t moved much at all?
And when the market ends up doing exactly what you thought it would do in the first place, it can be extremely frustrating.
That’s why having a plan for your trades before you take a position is crucial.
By planning your trades and trading your plan, you’re going to stack the deck in your favor.
If you know ahead of time that you’re probably a bit too early to the trade, then you won’t get shaken out when the market needs a day or two to get moving.
Happy trading,
Imre Gams
Analyst, Market Minute