Days like today, April 1, don’t happen all that often. The market starts at one end of the range and basically travels in almost a straight line to the other end – and then closes very near to the other extreme.

If you look closely, you can almost see the traders who “fade” the first few moves and put stops right beyond the most recent extreme.

So what happens next? The market trades in a tight range, while more people fade it, and then it makes a small push in the original direction – which does what? Take out those stops!

While taking out the stops… the market keeps on moving – in the same darn direction. In the end, you can look back and trading the market is very much like walking up (or down (although in that case it sprints)) stairs. The psychology of this? Traders feel like they miss a move – so they fade it thinking it is the only trade to take. They get stopped out and get frustrated. So… what do they do? They do it again. … and on we go. The missing clue in trading this is understanding that this is what is happening to MOST traders – and. more importantly, learning to notice the existence of your own frustration or fear so you can deal directly with the feeling and not get caught doing the same thing!