Over these five lessons, we are going to give you five important, yet very simple concepts that should be a part of every trade you do. These are some of the very things we train our VCM traders to do, to increase the odds of every trade being successful…

Every trader has at least one thing in common. No matter what timeframe, whether long or short, if trading a stock, future, or ETF, all traders must find a play that they presume will make them money. How they find that play can vary widely, and is usually at the root of whether a trader will be successful or not.

To help with this thought process are a series of questions. Hopefully, it will not take you long to decipher the proper answer to the questions to determine the trader who will be more likely to succeed.

Consider:

1. Do you just look through charts until something catches your eye, or do you look for things that that meet requirements of a trading plan?

2. Do you look at each chart and try to run through a checklist or requirements, or do you know your patterns so well that you look for a ‘picture’ of the pattern?

3. When waiting to enter, do you jump in early out of fear of missing the trade, or do you wait for the picture of the correct entry to appear?

Why be so hung up on the perfect picture? First, if you think about it, many setups may look alike at the early levels. If you were to simply copy the requirements out of the manual, without a deeper understanding, you may find hundreds of VCM buy setups on different time frames in a universe of 100 stocks. The question then becomes, “Which one will you actually play?” Not an easy question. The one you want to play is the one that is set up the best, and that is when the little nuances that make one chart differ from another so very important.

After a while, good traders begin to see a picture of what they want; a picture of money if you will. So the next time you see a 15 minute VCM buy setup (VBS), sitting on the 200 period moving average (200ma), and at the rising 20 period moving average (20ma), on strong minor support (mS), at a 50% retracement (50%), that forms with a bottoming tail (BT) and a narrow green bar reversal (GBR); consider taking a picture of that stock.

Here is another reason to be hung up on the perfect picture. You may not realize this, but your right brain thinks in pictures. It can ONLY think in pictures. If you think about it, you will find this to be true. If you do not believe, try this test. You are about to read two words. No matter what you do, DO NOT conjure up a picture of the above image in your mind. Ready? Go to the last line of this article, at the very end, that starts off, “Is this the picture of money?”. Yes!

How did you do? Did your mind figure out a way to NOT picture the image, without first picturing the image? What is the point? As a new trader, your mind has to picture this…

15 minute VCM buy setup (VBS), sitting on the 200 period moving average (200ma), and at the rising 20 period moving average (20ma), on strong minor support (mS), at a 50% retracement, that forms with a bottoming tail (BT) and a narrow green bar reversal (GBR)

…and create a picture of everyone of those events anyhow. Since many traders cannot picture these events, it leads to frustration. Have you ever spent minutes staring at a chart, and realize you did not even know why you were looking at it? Commit a perfect image of the total pattern you wish to find (whatever that may be) by printing out the perfect ones you do find after the fact, and commit them to memory. It will increase your speed looking at charts, and your accuracy. Do not look at every chart with the intention of finding a way to play it; look at every chart with one question: “Is this the picture of money?”