These days you never know what you will wake up to. It is fair to say that 2020 has been one of the most surprising years in modern history. We have a country that is divided down the middle politically, a coronavirus that has impacted the global economy, and a stock market that has seen some of its most violent moves in the past 90 years.
Recently, the stock market has begun to retreat after staging one of the best rallies in history from the March 202 low. Generally, after a huge run up the market will need to pullback or even stage a correction. This could be taking place right now, even while many so called experts are looking for a retest or even a break of the March 2020 lows. Either way, this is a traders market and it is not an easy one at the moment.
As a trader you are always battling many emotions. The legendary trader, Jesse Livermore, used to say that the four greatest emotions are fear, greed, hope and ignorance. While he listed many other emotions he observed that these four were the greatest. These days we are being bombarded with news and from every angle. Politics, protests, riots, virus news and countless geopolitical scenarios are just some of the latest topics in the media on a daily basis. This is why traders must always use charts as their guiding tool. It is honestly very difficult for anyone to digest all of the news that they are receiving. When a trader uses charts he/she can navigate the price action by using pattern, price, volume and time. This gives a chartist a clear advantage and takes away the decision making by listening to the news. After all, this is a really a traders market – stick to the charts!