Last night markets dipped lower on “news.” Gold bolted higher and crude spiked.
At the moment, futures are lower, after the release of NFP numbers. “The U.S. created just 98,000 new jobs in March to mark the smallest gain in almost a year, as hiring cooled off after a strong start in 2017. Economists polled by MarketWatch had predicted a 185,000 increase in nonfarm jobs. Yet the unemployment rate fell to 4.5% from 4.7% – the lowest level in almost 10 years – as the number of people who found work outstripped the increase in the labor force, the government said Friday.” – Source Marketwatch
This may seem out of left field, though I assure you there is a point. Please keep reading.
The year was 1987. The markets crashed over 30% in three trading days. Since then they have cruised higher, with bear markets along the way.
The chart below is my roadmap. Many items have been eliminated over the years, most of which were found to be of little importance. The major events remain.
While I’ve only been trading just shy of 30 years, I have learned a few things. News is hard to trade. Price action is not. Apply a strategy to the latter. Follow price action and a majority of your problems will be eliminated.
The take away is this, when you find yourself getting nervous, look at the daily, weekly and monthly charts. Consult the 9/20ema. Reduce your position size and continue to analyze what the market is telling you. Tune the media out. They want to sell you something and I can assure you, its not your profit they have in mind.
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