Course-Correct or Crash: The Choice Is Yours, Trader! [October Newsletter]

The Aussie market has been in such a firm sideways band for many months.

The All Ordinaries Index is repeatedly approaching a certain high level region before retreating from resistance back down to lower levels and then finding support.

Again and again.

It's making quite a few traders re-think their ideas about their macro filter.

What's a Macro Filter?

And how do you use one?

Read on to find out... plus find out how to course correct and how to spot bad advice.

Look at this weekly chart of the All Ordinaries Index over 5 years.

You can see the upper and lower boundaries of the index value.

I've drawn in a lower line and an upper line to show where there is support and resistance levels. You can also see a 30 week moving average which I use as part of a macro filter.

I also take note of volatility levels and use this information as a vital part of my trading process.

A macro filter tells you whether to enter into new positions or whether to stand aside.

Your macro is on when a prevailing uptrend is in place in the key index, and the market's volatility is at a manageable level.

These conditions reduce the risk of abrupt position reversals.

However, it can become complex when market signals fluctuate between suggesting a 'go' signal and then 'caution'. So it's crucial to devise a plan for potential scenarios if the macro strategy keeps flipping around like a fish out of water.

When your macro filter is off, you could:

• Close all existing positions.
• Opt not to enter into new positions.
• Consider selectively reducing exposure in underperforming sectors.
• Determine whether to discontinue pyramiding or continue this strategy.
• Reflect on whether it's an opportune moment to search for value investments.

The difficulty is that we've had the macro switch on, then off, then on again in quick succession.

An alternative filter you could use currently with your macro is to wait until the market is above a significant resistance level before entering into new positions.

That's what I'll be doing.

Does this part of your trading plan need a polish?

Pre-consider every market move before it happens and make a plan. That way you'll be more likely to keep a cool head when the markets change direction and trend consistently.

I like to have interactive sessions with traders to determine the level of their understanding.

There are often traders who doubt themselves – but 9 times out of 10, they are usually on the right track and just need a little push. However, there are also traders who are ever-so-smug in their belief that they are right, but they are often actually waaaaaaaaaaaaay off base. They are about to wander down that dark, nasty alley where traders go to die.

It's what happens next (after I tell them that they’re wrong) that will determine their future.

• The smart folks who are wrong quickly shake off the shock and immediately set about course-correcting.
• The less smart ones resist, squirm, and double down on their original path.

Anyway... that one guy fell into that second category. He was convinced he had it all figured out, but he was completely, totally, one hundred percent, in EVERY way - wrong. Based on no data at all, he had concocted a completely false version of reality.

You can't always rely on your own gut feeling in the markets without doing some testing first. And this is the real kicker: often, nobody will tell you when you've got a booger hanging out of your nose.

Not even your friends.

That's why it's essential to find mentors and colleagues who are honest enough to tell you the truth, even when it's tough love.

Maybe you don’t need to surround yourself with people who know a bit more than you do about the markets… but maybe you do… Ah, but what the heck do I know? I’m just a 30-year veteran with a loose truth-telling gene in my brain.

You have that image of yourself as a James-Bond'esque type of trader… or maybe Superman – capable of leaping tall buildings (and trades) in a single bound.

But inside, you know you haven’t got all the answers. Because things move fast out there in the trading world.

You can't keep your finger on every pulse. You're too busy for that.

That’s where we come in.

Chris Tate and I are your shortcut.

Bring it on!

When someone calls you a gambler because you're building a better future through trading… I say "Bring it on!"

When the market gives you loss after loss, but you still follow your trading plan to the letter for the very next trade, I say “Bring it on!"

When you get that huge trade that triples your trading account in just a few short weeks, I say "Bring it on!"

When you realise that no one can rob you of your identity as a trader - I say "Bring it on!"

When you get to travel the world, trading as you go, with the people you love most - I say "Bring it on!"

When you realise you can start from scratch and still trade your way to wealth - I say "Bring it on!"

When you know you’ve created a legacy and because of the actions you took to learn about the markets, future generations of your family tree will know your name - I say "Bring it on!"

It’s all there… waiting… inside the doors of our Mentor Program.

Register for Priority Notification so that you can "Bring it on!"

We’ll shine a light into your blind spots and get you galloping racehorse-style toward your goals.

If you haven’t yet registered for Priority Notification for our up-and-coming Mentor Program, what’s holding you back?

You’re going to want 'in'. Plus, I'm giving you incredible resources in the lead-up to opening for bookings in November - so it's time to get involved.

Keep reading to see how...

You've missed the first 2 videos, but you can catch up!

I’ve already started releasing my complimentary trading resources to everyone who wants Priority Notification about our next Mentor Program.

But you can catch up.

Register for Priority Notification and you'll get:

• Why trading psychology is your secret weapon
• Beginners corner - how to use charts to excel
• My entire 'Your Trading Edge' magazine most demanded articles archive
• Plus my 'How Much is Your Self Talk Costing You' Special Report

And in my next instalment to be sent to your inbox soon, I'll include a playlist of all of the videos I've previously sent out.

I'll continue to give you a heap of complimentary resources, plus, a heads-up so you can pre-book into our Mentor Program before everyone else when the time is right.

Really, it's all upside on your part (you can unsubscribe at any time) and you'll be tapped into the best info on the when, what and how of the Mentor Program.

You wouldn't trust health advice from an alcoholic smoker, would you?

And yet, we see it all the time on social media. It's frustrating to see smart people taking advice from folks who are totally unqualified to give it.

Plus they can suck your energy like a leech, and when it comes to getting the wrong advice, it can be disastrous.

Watch out if your sharemarket bro does any of this:

• Post blanket statements that sound like absolute truths (e.g. "Grunkcrypto will be valued at $1 kazillion by December 30th! Trust me...").
• They title themselves as a Finfluencer (ASIC has these shonks in their cross-hairs at the moment).
• They don’t have an AFSL (Australian Financial Services Licence).
• They pose in front of vastly expensive cars, while smoking cigars.

Hey, just quickly, have a look at this chart:

Who wouldn't like an equity curve like that?

Well, this result was produced by a famous US fund manager. You may have heard of him - Bernie Madoff.

Yep. All fake.

So, if your 'expert' says their results look like this, be cautious. Profiting all the time is like finding a unicorn - it just doesn't happen in this world.

We humans, with our fancy brains, are basically glorified monkeys. We're just trying to survive in a world where every market seems hellbent on taking us down.

So can you actually get ahead in the trading game?

Most definitely, yes, but the first thing you should do is be wary about who you’re listening to.

Want to hear 7 reasons why people choose us as their stockmarket mentor? Sure you do…

Until next time, happy trading!

Louise

P.S. A special thanks to everyone listening to our Talking Trading podcast.

It's so exciting!

We're in the Top 1.5% of podcasts globally as scored by Listen Notes, measured over 177,462,923 podcast episodes.

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