Anyone else share this mental problem?

[cashmoney69]

Whenever I look at a chart and see a nice up trend or down trend, I feel like I need to wait for a pullback or else I'm both foolish and impulsive to be buying the possible top. How do I get around this mental block...anyone else feel the same?



In my mind FSLR ( http://stockcharts.com/h-sc/ui?s=FSLR&p=D&yr=0&mn=7&dy=0&id=p90893460114 ) looks like a better buy because it came down some, even though it looks like it will go lower.

 

[pneuma]

Quote from cashmoney69:
How do I get around this mental block...anyone else feel the same?

[/B]

What you need to do is find something that you could use as a trigger.

Something like: closing above a previous peak; a stochastic cross; MACD crossing 0; or even two moving averages crossing; BUT find something that triggers you entering the trade.

Implement your exit strategy and problem solvered.

Let something objective make the decision and you just place the orders.

 

[makloda]

I think it's always a good idea to wait for a pullback because you can evaluate how the stock and the volume behave on falling prices. If volume is low and there is a constant bid even on falling prices I'd say that's a strong indication that it's just a minor pullback.

If you buy into extended strength you risk having to wait out the next pullback, and having to evaluate its characteristics while you're in the position.

 

[Bo_D_]

all systems ive worked on (thats not many though) have a trough indicator (e.g. MA has fallen in the last 10 days), so signals come when a good trending stock is having some weakness.

something that i have been thinking about lately is designing a system that buys- shares in up trend (trend following) and entry on weakness (using counter-trend indicators e.g. dip buys, 3 days down etc.) might prove worthwhile.

if your a discretionary trader with no interest in a systematic approach then pretend i said anything.

 

[lindq]

Quote from cashmoney69:

Whenever I look at a chart and see a nice up trend or down trend, I feel like I need to wait for a pullback or else I'm both foolish and impulsive to be buying the possible top. How do I get around this mental block...anyone else feel the same?

Your instincts are correct. You generally should NOT be buying into momentum, and should wait for a more favorable entry.

So you don't have a mental problem. Well, you may, but not in this regard.

 

[sumosam]

I agree. Buying the dips in a trending market is proven to be profitable. Also, I find sentiment indicators very compelling.

 

[indahook]

I disagree with everybody..lol

Buy it upon breaking the highs. I have no mental block with buying new highs or selling new lows. But I do have mental problems in general...one of them being OCD..I must check my doors 3 times before sleep to make sure they are locked!

buying the new highs in August or November would have had you feeling mentally charged..not blocked.

Have stops will trade...

 

[Thunderdog]

Quote from cashmoney69:

Whenever I look at a chart and see a nice up trend or down trend, I feel like I need to wait for a pullback or else I'm both foolish and impulsive to be buying the possible top. How do I get around this mental block...anyone else feel the same?

One man's mental problem is another man's trading strategy.

 

[o10maximus]

You likely do have a mental problem since your looking for advice here

 

[Reaver]

Quote from Thunderdog:

One man's mental problem is another man's trading strategy.

Case in point, my trading strategy involves eating crayons and facilitating the fulfillment of the prophecy.