I have been reading the latest book from Van Tharp, Super Trader and I want to highlight this passage about daytrading methodologies:
"For example, if you are a daytrader, open up a position and either take a small loss or get out at the end of the day. When you do that, you are not tied to the market all day, and you may find that you take small losses and get huge profits. Simplify your entry technique and concentrate on exits"
Now, lets cross this with Jesse Livermore remarks on the speculative line of least resistance:
"It sounds very easy to say that all you have to do is to watch the tape, establish your resistance points and be ready to trade along the line of least resistance as soon as you have determined it."
So, we have a powerful daytrading methodology in these two market generalizations. But JL added, "But in actual practice a man has to guard against many things, and most of all against himself - that is, against human nature."
Rings a bell? Maybe we should all print this post and have it by the trading desk.
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