Solving Common Trading Problems (Article 1 of 2)
NEoWave, Inc.
Founded by Glenn Neely, NEoWave, Inc. is dedicated to advancing trading strategies and Wave forecasting.
How NEELY RIVER empowers you to conquer the common trading problems and let profits run
Note: This is the first article in a two-part series.
A lot of people know me because of my expertise in Elliott Wave Theory. Over the decades, I’ve made a significant number of improvements to Wave Theory, discovering and teaching new patterns, rules, and concepts. NEoWave (my advanced version of traditional Elliott Wave Theory) is useful to understand the big picture of what will happen in the markets.
But after about twenty years of trying to use Wave Theory to trade profitably, I realized there’s a lot more to trading and investing than just predicting what will happen in the markets. For example, you might have a good macro-level forecast of a market, but this doesn’t inform micro-level decisions, such as when to enter and where to place your stops. In fact, I encountered – and needed to overcome – the main problems most traders face when it comes to trading.
PROBLEM #1: You constantly doubt your trading decisions, which leads to emotionalism
If you’re like the typical trader, you have a constant level of fear about what’s going to happen and uncertainty about whether your forecasts or assumptions are accurate. This undermines your confidence and creates a lot of emotionalism when it comes to trading, because you’re never quite sure whether you’re going to be right or wrong. And then, whatever happens, you need to figure out what your next step should be.
When it comes to a predictive approach to markets, you have to predict everything, and that requires near perfection in every step of the process. You have to predict what the market is going to do, where you’re going to get in, where to put your stops, and where to exit. This is all emotionally driven, because you cannot know for sure if your forecast is right or wrong (until after the fact, of course).
The result? You exit profits too soon and hold losers too long. Emotions like fear and uncertainty have no place in the trading process.
PROBLEM #2: You only follow one or two markets and struggle to find worthwhile stocks
Another big mistake most people make is only following one or two markets. This automatically limits potential. Some markets can go sideways for years, making it hard to pocket any profits. I remember about 10 years ago I was only following four markets: the S&P 500, T-notes, Gold, and the Euro currency. Three of those four markets went nowhere for about three years, I mean absolutely nowhere. I just couldn’t do anything with those markets, and it made trading very difficult.
Many traders follow just a few markets, because they don’t have a reliable way to objectively select and analyze a stock and then determine if it’s “ripe for the picking.” Clearly, no one wants to back a loser!
PROBLEM #3: You use only one trading style (a one-dimensional approach)
Another issue for many traders is only applying one trading style to their investment approach. Perhaps they are a trend follower, and they might use moving averages. Or they’re a bargain hunter, waiting for a stock to drop below its current estimated value. Or they follow overbought/oversold indicators to try to pick tops and bottoms.
But markets operate on all three dimensions at different times. Sometimes you’re in an environment where bargain hunting works, sometimes you’re in a trend following environment, and sometimes you’re in a top-and-bottom picking environment, especially if you’re in a big consolidation for a long period of time.
Each trading style has its particular time when it works well. But if you only rely on one of those trading styles, then two-thirds of the time you won’t make money, because you’re using the wrong approach.
PROBLEM #4: You focus on only one timeframe – you need to trade all three, depending on market conditions
A few years ago, I realized that focusing on only one timeframe is a huge problem for many traders. Some people say, “I’m a day trader” or “I’m a long-term trader” or “I like trading hourly.” But focusing on only one timeframe will drastically limit your ability to trade successfully. As I mentioned, markets behave in different ways (for example, a trend following or bargain hunting environment), and they also present opportunities in which different timeframes will be more likely to be tradable than others, depending on how active the market is.
You never want to just pick a daily, weekly, or monthly timeframe for your trading. If you do this, you’ll miss many trading opportunities, because your focus will be out of sync with the market’s rhythm. Market conditions dictate the best timeframe for trading.
MY GOAL: Create a methodology to solve these trading problems
For 25 Years, I’ve been working on a complicated, multidimensional puzzle – how to logically deduce these concepts to solve these problems and trade markets profitably. Further, how to define these concepts and communicate them to programmers, so they could program my methodology into TradeStation. I’ve spent probably 200,000 hours working on this project since the year 2000. In fact, this turned out to be much more complicated than "cracking the code" with Elliott Wave Theory!
Eventually, I had an “aha-moment”: I realized that market behavior is similar to the behavior of a river. This breakthrough concept led to my unique (and now proven) trading methodology and software: NEELY RIVER Trading Technology.
As mentioned, in developing NEELY RIVER, my goal was to define – and conquer – the critical trading problems:
The innovations of NEELY RIVER Trading are designed to solve all these trading problems. This approach to trading creates an entirely new way of thinking about markets, so you can objectively determine the direction of a market, whether it’s a safe market to enter, when to enter, where to place your stops and, of course, which timeframe and trading strategy to use.
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These are things you don’t personally decide or predict – the market decides it – and the NEELY RIVER Trading software guides you with automated, objective analyses, presented graphically. This means you’re removing all the factors that can lead to very bad decisions: subjectivity, fear, uncertainty, and the irrational decision-making that can occur when the markets get volatile.
Using NEELY RIVER, your trading becomes a far more rational, objective, unemotional, and profitable endeavor. Best of all, it helps you:
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Written By Glenn Neely
Glenn Neely is the author of Mastering Elliott Wave. Founder of NEoWave & Neely River Trading Technology. Trading Advisor & Market Forecaster.
#glennneely #neowave #elliottwave #forecasting #trading #marketstrategy #marketanalysis #tradingstrategy #tradingmentor #gold #goldmarket #stocks #stockmarket #financialmarket #emotionaltrading #nonemotionaltrading
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