How do you become a better trader? Probably for most of us, it can be as simple as looking at our prior trades in retrospect to see if they made sense?
I had a reader e-mail a little while ago and asked about a short trade he tried in the SPY which he covered for a small loss, to see what I thought about the trade … he already knew the answer in retrospect by looking at the trade. He was caught up in the small time frame chart (1-minute) and didn't realize he was swimming against the current.
In my site's Elliott Wave Theory lesson module I talk about how most day traders never make money and that the biggest reason is as simple as they often trade counter-trend. The sad thing is that almost all of these traders don't even realize that they are trading against the bigger trend.
That is why I am always looking at where we are in terms of the wave structure on multiple time frames … I want to avoid the simple mistake of getting long at the top of a wave structure (or short at the bottom of one), and I definitely want to know what the direction of the bigger trends are. That is what my Morning Outlook and Afternoon Trading Plan try to do … assess where the market is going and then trade based on that bigger directional bias.
