Don'ts

Question 1

Is it right to expect follow through?

Answer 1

I never assume any move will follow through

This is the foundation of the level-to-level approach

Question 2

Is it reasonable to expect pullback?

Answer 2

I never expect a pullback untill a support fails

I basically never expect a pullback until supports fail. I learned many years ago to banish all counter-trend thoughts from my mind until the market provides evidence.

Question 3

Is it reasonable to expect trend day (mode 1)?

Answer 3

never expect Mode 1 days

They are like winning a lottery - have not had one since Sept 11th. If people get 1 thing from my newsletter I hope its just to not think in straight lines, and think in terms of traps instead

Question 4

Is it reasonable to expect breakout?

Answer 4

80% of breakouts are false breakouts, so … I lock in profits at first level and … I never expect them

80% of breakouts are false breakouts, so my assumption is all breakouts will fail (thats how I trade and why I lock in profits at first level and leave a runner). Breakouts are just nice bonuses in my view and I never expect them

Question 5

Is it possible to time when pullback will occur?

Answer 5

Impossible to time when pullbacks will occur and even thinking about it just costs traders money

(either exiting longs far too early or for really awful traders/brand new traders, they will short and try to pick a top and time the pullback)

Question 6

What should trader do until support hasn’t failed?

Answer 6

Until then, ride the trend!

I never expect corrections. They happen when a support fails, but its impossible to know when that will be. It happens when the market decides, and we react with shorts at that point. Until then, ride the trend!

Question 7

Does it worth doing sometimes try counter-trending?

Answer 7

One way to dramatically reduce losses is to never fight the side that has control (bulls or bears).

Most easily avoidable losses come from doing so.

Question 8

What is the importance of staying with trend?

Answer 8

Staying on the right side of the trend is 80% of trading.
Bad trades get bailed out on the right side of the trend and
good trades are more heavily rewarded