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PHby u/pip_hunter_olaNigeria·3dDiscussion

Lesson Learned: Not respecting the broader market trend

Thought I'd share a quick one from early in my trading journey that cost me a fair bit. I used to get so fixated on individual stock setups that I'd completely disregard the overarching market sentiment. I'd find what looked like a solid buy on a dip for a great company, but if the broader market, say the $SPX, was clearly rolling over and making lower lows, my individual stock pick was likely to just get dragged down with it, regardless of its own merits. It took a while, and a few painful lessons, to really internalize that the tide lifts all boats, and sinks them too. Now, the first thing I check isn't the stock itself, but where the general market is heading. If it's swimming against the current, I'm probably not even looking.

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1 Comments

TAu/takeshitanaka·3d

This is a crucial lesson. I've seen many good setups fail because they swim against a strong market current. Do you primarily look at major indices like the SPX, or do you also factor in sector-specific trends for your trades now?

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