Avoid This Candle If You Want to Profit

Let me show you something that cost people money this morning.

We've been ripping for a week and everything has been working, so people were feeling pretty good about themselves coming into today.

Then this morning the market started sliding, and one giant red candle came out of nowhere and dropped straight through everything underneath it.

That candle is not a tradable candle. That's a flush, and it's the worst possible second to get involved.

And I want to explain why, because it has almost nothing to do with the chart.

When a move like that shows up I'm not really watching price, I'm watching people, because they see something running and they get excited, and that excitement is what creates the speed.

Then the speed pulls more people in, and now everybody's piling onto the same side at the same second.

Which is exactly when it snaps back. Almost every single time.

Look at what happened right after that candle today. We poked lower, left a long tail underneath, couldn't hold down there, and then ripped right back up.

Anybody who chased it got taken out on both ends.

Momentum works for you after you're in, and it works against you before.

I know that feels backwards, because a market that's already flying looks safer than one sitting still. At least the flying one is doing something.

But you don't want to be jumping in while price is bombing lower. You want it to come down, sit, and wait for it find some flooring, and then you go.

It's the same level either way, but the flush version leaves you stuck and the quiet version gives you something to work with.

And if the market's dumping on news, just leave it alone. Once a headline hits, the algorithms take over and they don't care what your chart says.

You'll get hit in both directions before you know what happened, and there's no setup worth standing in front of that.

Rock On,

Voz

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