Retail investor: I'm in this trade because the technicals show a bullish divergence on the 4-hour with a golden cross forming...


Me: Stop. Explain the trade to me like I'm a third grader.
Retail investor: ...what do you mean?
Me: How does the company make money? Why is it cheap? Why will it be worth more later? Third grader simple.
Retail investor: I... don't actually know. The chart just looked good.
Me: That's the key thing... if you can't explain the trade to a third grader, you don't have a trade. You have a guess...
Retail investor: So every position should have a dead simple reason?
Me: Mine do. Great company. Below what it's worth. Earnings growing. That's a trade a kid could understand... & it's the one that actually works.
Don't hide a guess behind fancy chart language...
If a third grader can't understand your trade, YOU don't understand it.
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