The 3 "Horsemen" of Trading Doom... AND 1 Sweet Dog Named Berry
Our FREE upcoming April 26 webinar is a tour-de-educational force for any investor -- of any market, on any time frame
by Nico Isaac
Updated: April 08, 2019
Last summer, my friend spotted a scared, straggly dog stranded on the side of the road and had to stop. He got the animal into his car and took it to the nearest vet where a bath and exam revealed a beautiful, albeit malnourished, female hound mix.
"This girl is all nose," explained the doctor. "As a stray, she has no control over her impulses. She'll catch a scent and follow it for miles and miles -- and by the time she stops to look up, she's totally lost. With discipline and training, however, she'll easily become a master hunter and loyal, life-long companion."
Today, that dog, now known as Berry, is one of the best game flushers of South Georgia.
Forgive us for saying so -- but, without a clearly defined discipline, traders and investors can easily end up like stray Berry. Acting on impulse, driven by "hunger" for a new trade and panic over "missing out," and chasing that powerful "scent" to its bitter, misguided end -- a situation our Trader's Classroom editor -- and the April 26 webinar instructor -- Jeffrey Kennedy calls the "three horsemen" of ill-conceived commitments: "Fear, greed, and self-doubt."
Take, for instance, a time when human emotion could have thwarted a major opportunity for long-term commodity investors. The year was 2011. Then, the bellwether CRB Index was orbiting a three-year high, and the mainstream experts were hot on the scent of a raging bull as these news items from the time make plain:
- "Commodities on fire. The surge looks set to continue" (April 11, 2011 Reuters)
- "Traders are... riding high on the magic [commodities'] carpet ride." (Dec. 22, 2010 Market Oracle)
- "Hard and soft commodities, and shiny and not so shiny metals are on a tear...it appears that we are in the midst of a commodity super cycle..." (Jan. 12, 2011 CNN Money)
How easy it would've been for someone without a strong technical discipline to get caught up in the heated optimism surrounding the sector and blindly follow the bullish scent. But in September 2011, that trail went abruptly over a cliff with the 5-year long, 50% strong collapse of the CRB Index.
Technical analysis, and specifically the Elliott Wave Principle, had a very different forecast at the time. In his September 2011 Monthly Commodity Junctures, Jeffrey identified a mature Elliott wave impulse on the price chart of the Continuous Commodity Index (CCI) -- the "old CRB."
Once complete, Jeffrey warned that the next move for commodities would be a historic trend change that would slash prices in half. Jeffrey's analysis and chart:
"A BEAR MARKET IN COMMODITIES: THE TRAIN IS COMING... A decline in the CCI should actually target the December 2008 low of 322.53, the terminus of the previous fourth wave."
The commodity sector crash followed, pushing prices into the "previous fourth wave" area cited by Jeffrey -- where they continue to trend sideways today.
If you're new to our pages, this example leads to more questions, such as:
- What is an Elliott wave impulse pattern?
- How did Jeffrey know that five-waves up signaled a terminating trend?
- Why did he cite the "previous fourth wave" as a likely target for the ensuing decline?
On April 26, we're giving you the answers, and then some, in our FREE, all-inclusive webinar: "How to Spot Reliable Trade Setups in Any Market on Any Time Frame."
You'll hear one of EWI's analysts and former CNBC contributor's Jordan Kotick field the most pressing questions and hand them over to his friend and colleague Jeffrey Kennedy to answer. The end result is certain to be an educational, tour-de-force of technical analysis.
The webinar is free. Attendees will come from all over with focus on every market from stocks to commodities to forex. Some will be short-term scouters; others long-term investors. Some will be Elliott wave newbies and others, seasoned veterans.
Whichever group you fall into, you will learn:
- The 5 core Elliott wave patterns and how to recognize them on real-world price charts
- The key characteristics of counter-trend price action
- Where to start your Elliott-wave count on a price chart
- What trade setups give you the highest risk-reward ratios
These FAQ's are sure to make the cut -- with many more surprising inquiries on the table. And, you can attend the 45-minute webinar as one of the many benefits of a FREE Club EWI membership.
Join today and mark your calendars for this one-of-a-kind educational opportunity. By the time it's over, you'll be one step closer to honing a Berry-like discipline in the hunt for high-confidence trade setups.
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