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You'll Never Make Big Money Trading Unless You Understand This

I'm currently staring at my charts and it's green across the board.

The Nasdaq, Dow Jones, and S&P 500 are all hitting all time highs. Smallcaps look like they're about to play catch-up.

Momentum is clearly to the upside, and it doesn't look like it's slowing down any time soon. Any kind of correction is short lived and rotational in nature.

Investors are complaining that this market lacks breadth, that somehow only a handful of stocks like AMZN and GOOGL are "propping up" this market.

Yet we have over 100 stocks in the S&P 500 that are up 20% for the year.

And truly objective breadth measurements are still very strong.

Are You Holding Back?

With that backdrop, let's talk about trader discipline. For those market participants that have a timeframe in weeks, not years.

The most tired line of thought I hear is about how nobody knows how to respect risk.

That it's OK to not fully participate in a rally because once the turn comes, all those undisciplined traders will get runover.

You know... Johnny trader with 6 months under his belt is ripping out thousands by buying calls in NVDA, NFLX and FB.

But don't worry, you tell yourself, because you just have to wait for the Fed to sneeze and they'll get runover.

Here's the thing...

Have you ever thought about the other side?

Discipline in the market runs both ways. Sure, you focus on the downside risk, but what about the upside risk?

Do you really have the discipline to know when to press your bets?

You've been counting the cards, and you know the shoe is stacked with face cards.

Are you going to take advantage of it?

... or just keep complaining about how the market is "rigged?"


by Steven Place

Steven Place is the founder and head trader at