Every trading method has an implicit underlying assumption

Every trading method has an implicit underlying assumption. Some of the assumptions are based on observed market behavior and some are based on beliefs. If the underlying assumptions behind your trading methods are sound and based on structure of the market then they work. More importantly they can be replicated by others.

Above all assumptions based on market structure persist and those edges do not degrade. The tactics might change but the structural phenomenon do not change. On the other hand many trading beliefs are just beliefs , they are strongly held beliefs and do not work unless you adopt same belief system.

One of the most enduring phenomenon in the market for hundreds of years has been that price tend to move in direction of range and volume expansion. The magnitude of follow through might differ based on market conditions but this phenomenon has persisted on individual stocks for hundreds of years.

Look at the following examples of stocks that had large range and volume expansion near start of their big moves.

In each of the above case at the beginning of the move there was abnormal magnitude of range expansion and volume expansion. These stocks had in many cases highest traded volume or range expansion in their life time of trading or in years. That one day big move has translated in to start of a new momentum phase lasting weeks or months and of big magnitude ranging from 50% to over 1000%.

On a day to day basis not many stocks exhibit this kind of above average range and volume expansion. By focusing on those stocks you can find big winners.

The underlying structural phenomenon in these cases are :

Stocks move in direction of range expansion
Stocks move in direction of volume expansion
Surprisingly good news leads to big range and volume expansion
Such surprise does not result in just one day move, it can kick off a mufti month /week move
The up move has number of 3 to 5 day momentum bursts

Now this is a repeatable phenomenon in market. And it has big edge. If you believe that to be true then you can build trading methods around it by using a set process. Like this there are number of structural phenomenon in the markets and trading methods have been developed to exploit such phenomenon.

Lot of time new traders base their trading methods on questionable assumptions and as the assumption holds no water , the trades based on those methods do not work.

The starting point for any trading method should be to thoroughly examine your assumptions and how valid they are.

What are the underlying assumptions behind your trading method?

If you can not answer that question easily, then its time to reexamine your approach.

Best site to learn to trade

If you are serious about your trading and want to build an enduring edge, the Stockbee Member site might help you.

Members tell me they have tried a lot of things before coming to my site, and it has offered them the most extensive and detailed methods to swing and position trade. Members range from very experienced traders to novices.

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As a member, you will learn the basics of swing trading, momentum investing, growth investing, and risk management. You will learn about Stockbee Momentum Burst breakouts, Stockbee Trend Intensity Breakouts, Stockbee Episodic Pivots Breakouts, Stockbee Lemonade Strategy for 401k, and many other member-shared methods.

You will learn how to set up your own scans, how to select the right kind of stocks, how to set up stops, when to enter, when to exit, how much to risk, how to track your trades, and all other details about trading.

You will learn about developing your own methods and not relying on others for trade ideas. Develop your own edge. Once you develop your own method, you will have a lifelong profitable method.

The site gives you an opportunity to interact with some of the most successful traders and learn from them about their trading methods. It is a vibrant community with members from different backgrounds and experiences willing to help each other. Members have shared their methods, scans, software, backtests, and market insights.

Every day, the emphasis is on continuous learning and upgrading of market knowledge and setup knowledge. The members range from hedge fund employees, financial advisers, active swing traders, investors, and new traders.

You will see that many trading bloggers have been using my market timing methods, scans, and chart templates. They have developed their own methods based on my methods.

Almost every member comes through a recommendation of some of the leading trading bloggers and trading sites. 80% or more members continue to be members for more than 3 years. Most tell me that they stay on because every day they learn so much from the members' site.

If you are looking to develop your own trading strategy, the membership site might be for you. You have to be willing to put in the effort to build your own method. There are no silver bullets offered on the members' site. Every method, every scan, every nuance is detailed, and all possible help is offered to design your own method.

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