2021 predictions … they’re everywhere right now. Most of them are in the form of listicles. In the financial world, we’re seeing headlines like “3 Stocks to Buy in 2021.” Or “5 IPOs to Watch in 2021.”
If you read the first post in this series, you know how I feel about those lists. You should read the post. But in a nutshell: they’re designed to get clicks. Sadly, for too many newbies, they’re an introduction to the stock market.
Well, this year, I refuse to play that game.
So #2 on my list of four things to change has to do with 2021 predictions…
Table of Contents
- 1 Learn to React Instead of Predict
- 2 3 Predictions for 2021
- 2.1 2021 Prediction #1: If You Learn to React, You’ll Be a Better Trader
- 2.2 Learn to React to Breaking News
- 2.3 2021 Prediction #2: If You Learn What Your Opponent Desires, You’ll Gain An Edge
- 2.4 Know Your Opponent, React Accordingly
- 2.5 2021 Prediction #3: If You Study Every Day, You’ll Start to See the Patterns in Real Time
- 2.6 It’s the Same Damn Patterns
- 3 Resources to Learn How to React
- 4 Next in This Series…
Learn to React Instead of Predict
It’s a funny thing about predictions. People want to believe them. They look for reasons why the prediction is right. They try to find confirmation. It’s an example of cognitive bias.
The sad thing is, the pundits and so-called teachers don’t have to be right very often for people to believe them. They only need to be right every once in a while for people to trust them.
So here’s my take: forget about predictions in 2021. Forget about predicting the stock market from now on.
Anyone trying to give you 2021 predictions about the market is full of BS.
The amazing thing is…
Your Brain Is a Supercomputer
We evolved to adapt to our environment. We also evolved to react quickly to what we see, hear, or touch. It’s built-in protection.
So it blows my mind when newbies get stubborn about what they predict a stock will do. Or how much due diligence they’ve done. Or worse, even after about a 30% loss, they “just know this stock will come back because this is world-changing tech.”
You wanna move in the right direction in 2021? Do you want to get closer to self-sufficiency and profitability?
Use your brain and react to the price action. Stop basing your trades on a prediction. And if a trade goes against you, get out. Even if you take a small profit, but it’s not doing what you want, that’s MUCH better than holding and hoping.
ALL of my top students are self-sufficient, they learned early on NEVER to follow alerts from anyone else, just speeding up their learning curve by utilizing bits & pieces from MANY traders to optimize their own trading process & reap the rewards of all that knowledge over time!
Make this agreement with yourself right now…
In 2021, predictions are a thing of the past. Put them behind you. Say, “Goodbye, predictions. Thanks for all the fun. Good riddance.”
To put it in perspective…
I never trade based on predictions. Not predictions about earnings, products, or new deals. Ever. I wait to see how the market reacts. And then I react. That doesn’t mean I wait around when news is spiking a stock. But I also don’t wait around for the stock to tank again.
It also doesn’t mean I never “buy the rumor, sell the news.” But again, I pay attention to how the market reacts to the rumor. There’s no prediction involved.
Never get into trading just for the potential $ you can make (never forget most people lose), the real beauty of the industry is the challenge of becoming one of the few able to quickly combine using many indicators to try to beat the odds, it's the ultimate challenge/brain game!
Even on very speculative trades, I have a trading plan and follow it. If the stock doesn’t do what I want, I get out.
Use the supercomputer sitting on your shoulders. Here are a few examples…
3 Predictions for 2021
Here’s the cool thing about my 2021 predictions … The format is “if you do this, then this will happen…”
So you get to decide whether to take action. And then, at the end of the year, you can tell me if my predictions were right. How’s that? I might be wrong. But I doubt it.
2021 Prediction #1: If You Learn to React, You’ll Be a Better Trader
Learn to react. And that means you have to understand all the indicators I teach. You can’t expect to focus on only one indicator and consistently do well.
Here’s an example…
Learn to React to Breaking News
How does breaking news or different kinds of news affect these stocks? You almost have to be a scientist. You have to experiment every day. The good news is, experiments come at you every day.
So then you take notes and write down your thesis. Then you review your trades and see how well you did. Only then, over time, will you begin to understand what kind of news potentially moves a stock.
But you can’t stop there. Because if you think it will always play out the same way, you’re just as ignorant as the people trying to predict. It won’t always play out the same way. But every time you see it, you gain experience. You’ll know the potential because you’ve seen it. You’ll know the possibilities. And THAT gives you the opportunity to react.
Then, if a stock doesn’t do what you think based on the news, you get out. Keep in mind that the news catalyst is only ONE of seven indicators. You need to learn all seven. (Learn about the seven indicators of the Sykes Sliding Scale here.)
2021 Prediction #2: If You Learn What Your Opponent Desires, You’ll Gain An Edge
Trading is a battlefield. You need to come prepared. Part of that is showing up with the best tools for the job. But another part is understanding your opponent. You want to know how they think. What are their desires?
It might sound crazy, but it’s not. Check it out…
Know Your Opponent, React Accordingly
Your opponent believes the 2021 predictions. They want to believe. It makes them feel better, especially if they’re lazy. It makes them feel better about chasing alerts and hot picks. And it makes them feel OK about not studying.
But what’s really going on is much deeper. It’s based on hidden desires.
All you have to do is watch the StocksToTrade social media search tool to see how derelict these idiots are. I’m not talking about promoters. (The promoters are unethical, but most of them know exactly what they’re doing. And the eventual outcome.)
I’m talking about gullible newbies. They thank the promoters for their ‘free’ advice, ‘free’ hot picks, and ‘free’ due diligence. It’s THEM you’re competing against.
Do you want an edge? Good. Check this out…
As long as you understand your opponents’ desires, it gives you an edge. What do they desire?
This isn’t specific to trading, it’s everywhere. But when it comes to money, desire gets amplified by greed.
Thanks to greed, your opponent desires…
- To be right. Everyone wants to be right so badly they’re willing to endure pain. They’ll ride a loss to prove a point. “It’s not a loss until you sell …” Meanwhile, my top students and I take profits along the way.*
- To be part of something bigger. They want to be in a group where they feel good about themselves and their future. Even if most of what they’re seeing or reading is complete and utter BS. When confronted with disconfirming truth, groups tend to support each others’ false beliefs more.
- Secret knowledge. Everyone wants to be in on something other people don’t know about. So the promoters give these morons exactly what they want. Until they don’t. Then, like all pumps, the stock fails. But they’re all in it together, so they think it’s OK.
Please read this section again. Note: these are all common desires. We’ve all experienced them. The key is to understand them. And don’t fall prey to them. Learn to react.
2021 Prediction #3: If You Study Every Day, You’ll Start to See the Patterns in Real Time
They’re never exactly the same. And they don’t always play out. So how can I get away with saying they’re predictable?
Because even though I don’t know when the next one will happen…
And even though I can’t predict how big or which stock…
It’s the Same Damn Patterns
I’m 99% sure there will be another supernova. I’m 99% sure there’ll be another morning panic. And a beautiful first green day that gaps up the next morning. There will be stocks that follow my seven-step framework. (My lawyer hates it when I talk like this…)
The point is, when the patterns come along, if you’re prepared, you can trade them. That doesn’t mean you’ll win. Look at dozens of my 2020 dip buys and you’ll see comments like this from December 10…
World Series of Golf, Inc. (OTCPK: WSGF)
Exit comments: No bounce so rule #1 cut losses quickly, looks like I’ll get my wish under .05, potential rebuy into bigger panic.
Or this trade about 15 minutes later…
Strikeforce Technologies, Inc. (OTCPK: SFOR)
Entry comments: Even bigger panic this time so I take a bigger position, goal is to make 10-20% on the bounce.
Exit comments: Small gain, but wanted the .06s, Etrade not giving me great executions today, maybe market makers are pulling prices faster too, will do video lesson, but I’m gonna start to size down my trades today since I recognize I’m off or the market’s off, something’s not clicking like earlier this week, always look to adapt.
(*Please note that these kinds of trading results are not typical. Most traders lose money. It takes years of dedication, hard work, and discipline to learn how to trade. Individual results will vary. Trading is inherently risky. Before making any trades, remember to do your due diligence and never risk more than you can afford to lose.)
Those two trades are a great example of why you need to study. And they’re examples of reacting instead of predicting.
Resources to Learn How to React
The next post in this series is on the way. In it, I’ll explain one of the most important parts of the entire equation. Get a head start here…
Trading Education Resources
Every day I get DMs asking me how to get started. Here are a few resources … You get to choose your level of commitment.
FREE Penny Stock Guide
Monthly Plans on Profit.ly
Tools for Traders, By Traders
Learning to react is a huge part of becoming a successful trader. But it helps if you get the right news. Imagine two former Wall Street traders curating the most impactful news. Then imagine you get alerts from them super fast. Sometimes they beat the big financial sites by several minutes. In trading, that’s a lifetime.
(Quick disclaimer: I helped design and develop StocksToTrade and am an investor in it.)
Next in This Series…
There’s something that happens naturally when you react instead of predict. It almost forces you to trade in a manner that reduces your risk in the long run.
What is it? It’s coming in “4 Things to Watch in 2021 — Part 3.”
What do you think of 4 Things to Watch in 2021 — Part 2: 2021 Predictions? If you get it, comment below with ‘I will react instead of predict.’ Comment either way. I love to hear from all my readers!