{"id":13630,"date":"2011-08-02T14:51:59","date_gmt":"2011-08-02T18:51:59","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=13630"},"modified":"2011-08-02T14:51:59","modified_gmt":"2011-08-02T18:51:59","slug":"a-theory-on-why-you-fade-when-you-shouldnt","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/a-theory-on-why-you-fade-when-you-shouldnt","title":{"rendered":"A theory on why you fade when you shouldn&#8217;t"},"content":{"rendered":"<p>I know an excellent trader who underperformed today mainly trading PCS.  He faded the weakest stock in the market and now sits frustrated, dejected and angry.  Pass him on a desk and you would see his cheeks red and the scowl of a defensive end ready to rip the head off of the opposing QB.  I do not mean to play trading psychologist as I have no formal training in this discipline.  However after many battles in the trading arena one cannot help but learn an awful lot about how we ourselves as traders can get in our own way.  More important I have made this mistake before and had to have a long talk with myself about why I would do such a thing.  Let me share my theory on why some fade the weakest and strongest stocks in the market.  Perhaps this can help your trading game.<\/p>\n<p>You are off-the-charts competitive.  The resolution of the debt ceiling debate has been your wish for weeks.  If only Congress would get this behind us so there is more directional color from the market.  We are starting to get very close to the end and it appears a deal is near.  Now it is time for you to pounce.\u00a0 Literally you cannot wait until the bell rings.  You now expect big cash taken from the market very soon.<\/p>\n<p>PCS catches your eye.  It has gapped down from 16 to near 13 somethingish.  A quick check of the 6 month chart in PCS shows some possible support at 12.70ish.  We open.<\/p>\n<p>Perhaps you fade the support level and get stopped out.  Perhaps you want to watch PCS trade on the Open before making a play and it plummets without you.  Perhaps you are short but not with big size.  Whatever your attack plan, its 10 minutes into the open and you feel you have underperformed.  PCS stands below 12 but you did not make a chop.<\/p>\n<p>Well this is unacceptable.  You are a winner.  You are an uber-achiever.  Your body feels physical pain if you are not succeeding.  How do you correct this?  You fade the stock and watch it reverse.  Now you will not be underperforming.  The trend traders will now not be ahead of you.  You will now have gotten much more out of the opportunities from this stock as you profit on the reversal.  The market will then confirm your excellence.<\/p>\n<p>Does this sound like you?  If so you have so work to do on yourself before your trading can improve. But also understand you are not the only trader who does this.\u00a0 You are not the last trader who will do this.\u00a0 And understanding why you do this is a helpful first step in ridding this infection from your trading game.<\/p>\n<p>Bella<br \/>\n<a href=\"http:\/\/www.amazon.com\/gp\/product\/0470529407\/ref=s9_simh_gw_p14_d0_i1?pf_rd_m=ATVPDKIKX0DER&amp;pf_rd_s=center-3&amp;pf_rd_r=0MFCR0Y969NKKGT62YYX&amp;pf_rd_t=101&amp;pf_rd_p=470938811&amp;pf_rd_i=507846\">One Good Trade<\/a><br \/>\n<a href=\"http:\/\/twitter.com\/smbcapital\"><img decoding=\"async\" src=\"http:\/\/twitter-badges.s3.amazonaws.com\/follow_me-c.png\" alt=\"\" \/><\/a><\/p>\n<p><a href=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2011\/08\/pcs.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-13631\" title=\"pcs\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2011\/08\/pcs.png\" alt=\"\" width=\"590\" height=\"560\" srcset=\"\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2011\/08\/pcs.png 590w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2011\/08\/pcs-300x284.png 300w\" sizes=\"auto, (max-width: 590px) 100vw, 590px\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>I know an excellent trader who underperformed today mainly trading PCS. He faded the weakest stock in the market and now sits frustrated, dejected and angry. Pass him on a desk and you would see his cheeks red and the scowl of a defensive end ready to rip the head off of the opposing QB. I do not mean to &#8230; <a href=\"https:\/\/www.smbtraining.com\/blog\/a-theory-on-why-you-fade-when-you-shouldnt\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":144,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10,455],"tags":[161,1828,1193,653,1354,1349],"class_list":["post-13630","post","type-post","status-publish","format-standard","hentry","category-mike-bellafiore-bellas-blogs","category-trading_psychology","tag-fading","tag-smbu","tag-trader-education","tag-trader-training","tag-trading-coach","tag-trading-mentor","no-post-thumbnail"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>A theory on why you fade when you shouldn&#039;t | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/a-theory-on-why-you-fade-when-you-shouldnt\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A theory on why you fade when you shouldn&#039;t | SMB Training\" \/>\n<meta property=\"og:description\" content=\"I know an excellent trader who underperformed today mainly trading PCS. He faded the weakest stock in the market and now sits frustrated, dejected and angry. Pass him on a desk and you would see his cheeks red and the scowl of a defensive end ready to rip the head off of the opposing QB. I do not mean to ... Read More\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.smbtraining.com\/blog\/a-theory-on-why-you-fade-when-you-shouldnt\" \/>\n<meta property=\"og:site_name\" content=\"SMB Training Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/smbcap\/\" \/>\n<meta property=\"article:published_time\" content=\"2011-08-02T18:51:59+00:00\" \/>\n<meta property=\"og:image\" content=\"http:\/\/twitter-badges.s3.amazonaws.com\/follow_me-c.png\" \/>\n<meta name=\"author\" content=\"Bella\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@smbcapital\" \/>\n<meta name=\"twitter:site\" content=\"@smbcapital\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Bella\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" 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