The title of the post may seem counter intuitive because all of our lives we’ve been rewarded for being first. First across the finish line and being number one in our class are superb achievements. Yet in trading, first is not always best.
Here’s a guideline for trading — sell the second high and buy the second low.
Sell or go short the second high in a down trend. Here’s an example of selling the second high for traders using a longer time frame. This is on a daily chart –
Same symbol, QQQQ, but now an hourly chart shows the second high for short-term traders.
Staying with the same QQQQ chart, here are the second low buy points in an uptrend for the longer time frame.
And lastly, an hourly chart with the second low buy signals for someone that may day trade.
Being first in trading is not always the best idea. By watching the highs and lows, and with a little patience you can be like the second mouse — he always gets the cheese!
