The Hidden Trading Secrets of Wall Street (Part 3 of 7)
STOP FIGHTING!
That's what I tell my kids no less than 20 times a day. Why do we as humans seem to find it enjoyable to take the path of most resistance?
I don't have the answer to that question but when it comes to trading I can tell you one of the biggest trading secrets it to simply STOP FIGHTING.
In this section you will discover the market already has a natural momentum to it. If we can align with that momentum and trade in the direction of that momentum it makes trading and ultimately profiting from the market substantially easier.
Here's What You Will Discover:
- The natural ebb and flow of stock price
- Avoiding the fight, working with momentum
- Using the secret of Power vs Force
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[inaudible]
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Hello and welcome back to seven trading secrets, underground wisdom. They hope you'll never find out. And boy, we've already found a couple of those. Haven't we in secret number one, we discovered that trading can be simple. And what if, what if everybody found out how simple trading really could be? Well, the so-called professionals who like to scare people into thinking that you're not smart enough to trade the market, that you need their services or those professionals, their services would dry up because everybody would be doing it on their own. Yesterday. We learned about the idea of working with known data and not guessing, and wow, what would happen if everybody who had some exposure to the stock market, uh, discovered that you don't have to do all this fundamental analysis and it doesn't take weeks or months worth of, of, of, you know, looking at a trade and running all the calculations and trying to figure out when to get into the trade and when to get out of it.
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It doesn't take any of that. We can simply look at historical data and make an educated decision based on what's already happened. What if people realize how simple it really could be? Well, we would turn wall street on its head, the so-called professionals. They would lose their careers because every individual would realize that they have it within their ability to trade the market. My name is Jeremy Whaley course. I've been your guy on this seven secrets journey. And in this particular video, I've got something fresh for you. This one is based on a book. Actually I call this power versus force. It's secret number three, power versus force. And it's based on a book principle by a man named David Hawkins just a few years ago. He put this book out called power vs force. I would recommend anybody to read the book because it's a quite fascinating study.
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And it talks about, um, using our innate. It actually talks about it from an energy, um, position, but in terms of psychology, in terms of human, uh, philosophy and all this about, you know, not getting stuck in these really low level fights, which happened to be usually based on fear and angst and shame and all this stuff, but rather staying in a higher state so that we can actually go with the flow and what the whole premise of the book is is that whenever you get to those higher States, you're going with your natural human momentum and everything starts to flow so much easier. So instead of fighting through everything, we're actually working through it with power. Guess what? This applies straight to the stock market. Whenever I was first looking at this, I had the recollection of the grizzly bear and the salmon. Have you ever seen a grizzly bear and a salmon now think about how appropriate is for the stock market?
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Just think about this poor little salmon has lived his entire life in the stream and he's gone out into the ocean and he's coming back. It's the end of his life. And he's fighting swimming up the current up to current, trying to get home working so hard only to be gone, hold up by the Bayer. Isn't that a perfect metaphor for what happens in the stock market. People will work so hard to try to keep buying a stock while the trade keeps going down further and further. And finally the bears just totally wipe them out or the opposite people have been in a bull market and they keep trying to time it and they keep trying to, you know, make that bearish switch. And then the bull is just trampoline. And boy, I think the graveyards of, of uh, wall street are pave or filled with people who have tried to time the market and they may have been right.
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They just were not solvent long enough to actually prove they were right. Well folks, um, they need to discover the secret of power versus force power versus force. And I like to say it this way, don't fight the market. Don't fight the market. I had to learn this the hard way. And so many people had to learn this the hard way. And if you're anything like me, whenever I was learning to trade, what I would do is I would look at the trade and I would think, okay, it's really high. It needs to go down. And so I'd start using some bear strategies. Maybe I was shorting it. Maybe I was buying some put options or, you know, another type of a bear strategy. And I was always trying to time the market in that way. And I was fighting it. I was fighting the momentum.
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I was fighting the trend. And what happens when you're fighting the trend is you get trampled by the bulls or eaten by the bears. It's really that simple. So how do we avoid fighting the market? How do we avoid getting eaten by the bears and trampled by the bulls? The answer is trade with the momentum trade with the momentum. This was, was, and is still one of the greatest epiphany's I've ever had in trading. And whenever I started being intentional about trading with the momentum of the trade, everything turned around now, obviously I'm not going to sit here and say, I never have a losing trade. I still have losing trades all the time. In fact, you know, usually somewhere between, uh, you know, on a good week, maybe 20%, but on a bad week, maybe 40 or 50% of my trades are going to be losing trades.
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That's just the nature of the beast. But if we want to be profitable, we want to be consistently profitable. We need to learn how to work with them, momentum of the trade. Okay. So let me maybe a couple of tips here. First of all, avoid fighting the momentum by trading with the predominant trend trading with the predominant trend. Every time that you look at any stock, there's going to be a predominant trend. That trend may be a bullish trend. Maybe moving up, maybe a bearish trend, maybe moving down. Now it's not necessarily right to be bullish or bearish. Either of these is fine. Both of these are plenty, plenty abundant in the market and either can be profitable, but what's really critical is in a bullish trend. You don't want to be trying to take bearish trades and embarrass trend. You don't want to be taking bullish trades.
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We don't want to fight the trend. Don't fight the predominant, uh, direction of the trim. And here's my second tip for you. You want to avoid trying to do those short term corrections or those short-term pullbacks. As we like to call it stocks, don't go straight up stocks go up and they come down. They go up and they come down. And what so many traders like to try to do is they try to time when those little short term corrections are going to be, so they can take a counter trade and it could be counter to the market folks that is a losing proposition. Don't do it. Don't get distracted with it, trade with the predominant trim. And then next don't get sucked into trying to guess at the bottoms and guests at the tops look, folks, this is probably never going to happen. You know, there's an old saying that says, everybody gets to pick a top once and everybody gets to get in at the bottom once and that's it.
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Okay. And I've done it. I've gotten in at the bottom and I've gotten out at the top. And, uh, you know, I've been able to do that. I've actually done it more than once. So, you know, I'm pretty, pretty amazing, right? No folks, that is not the way that you're going to beat the market. The way you can beat the market is to be consistent with state staying with the predominant trend, avoiding the little retracements. And don't try to be smart. Don't try to be, you know, the, the guy or the girl, that's trying to get it at the top, get it, get out at the top, get into the bottom. Um, don't be trying to time the market in that way. What you need to do is you need to pick a wave and trade it. It's that simple, pick a wave and trade that wave.
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Now, whenever I talk about a wave, what am I referring to? I'm referring to the way that markets move markets move up and down and up and down and kind of like in a wave pattern. In fact, we actually refer to them as waves of price action. And so pick a wave and trade with that wave. You know, stocks don't do this right here. They don't go straight up. A lot of people tend to get this idea that whenever you find a winning stock, it's going to go straight up. Look, folks. Those are far and few between there's over 3000 publicly traded stocks. There's one Tesla that does something like this in one year, but even a stock like a Tesla that, you know, takes off like a rocket. You know, it's still going to have corrective moves because the reality is markets go more like this picture right here, they go up.
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And then they come down, they go up and they come down. They go sideways a little bit and then they continue. Or if the trend reverses, then they go down, they bounce a little bit. They go down, they kind of bounce and go sideways a little bit. And then they continue. Okay. That's the way that markets actually move. Never forget that that's the way the markets move. And that's the way that you need to trade. So if we have the predominant trend is moving bullish, we need to trade in the bullish direction. If the predominant trend is moving bearish, then we obviously need to trade in the Paris direction. Now here's the interesting thing. This wave structure, this way structure is what you see. If you zoom out far enough, what you realize is, well, that original idea that the stock just keeps going up.
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It's there, but that's not the path. Is it? No. That takes time to get to where it just looks like it keeps going up and keeps going straight up over time. The gel journey of getting there is going up and down and up and down and up and sideways. And it's those down moments. And it's those sideways moments that will freak traders out. And that's where more money is lost than any other time in the market. Most people don't lose money. Bye bye. Getting in the wrong direction of the trade and then just holding it forever. Most people don't do that. That, that takes somebody who's, you know, not, not tracking their portfolio. They're not tracking their trades. And they're just letting stuff go to pot. Um, most people lose money by timing, these entries and exits, we do have to do, but there's ways to do it.
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Um, but they lose money with time and exits. And they're constantly in the wrong side of the trade. And that's where people end up losing so much money. So whenever you trade with the momentum, what ends up happening is you're going to find that your gains become a lot easier because you're working with the momentum. You're working with the power instead of fighting it, instead of fighting everything all the time and trying to work against the trend, you're working with that natural momentum. And so the profits become easier. And guess what? Your analysis becomes a whole lot more forgiving. Your time becomes more forgiving. Uh, just simply because you're actually working with the moment, some of the trends, okay, now I've just applied this concept to the world of analysis. Uh, the reality is this whole idea of power versus force. It shows up all over the world of trading.
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We can apply it to strategy. We can actually apply it to risk. We can apply it to a mindset. That's really what it is. It's really a mindset thing. And so I'd encourage you, not just in trading, but in everything, go with the flow, quit fighting so hard and see where the natural ebb and flow is going to go. And when, if you can kind of get into that sink, you get into that groove. You're going find that it all works a whole lot better. So that's there. Our third secret power versus force instead of working so hard to fight, fight, fight, fight, fight, we'll call that force. We're going to use that power. We're gonna use the momentum and we're going to supercharge our results by getting that momentum, working in our favor.