In this weekend’s video lesson we take a look at the overbought conditions currently in the $SPY $SPX and $COMPQ $NDX $QQQ and why we should only expect a short-term pullback and not a serious correction. I will be using the Keltner Channels, RSI(14), Accumulation/Distribution indicators along with the advance/decline lines (breadth) to gauge the severity of any potential downtrend/sell off that may occur in the short-term.
After that, I explain how to intelligently cut your losses when you are wrong on a trade idea, using the trade idea $NUS from last week as an example. Along with the lesson in cutting losses, I explain the reasoning behind the size you place in a trade, depending on the quality of the overall setup, using $EVC and $NUS as recent examples.
Finally, we wrap it all up with a discussion on where you should focus your time and energy regarding finding new trade ideas, depending on the leadership in the market environment you are currently operating from.
Happy Fourth of July everyone. Aloha.
