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Why Having A Disciplined Trading Strategy Leads To Consistent Market Profits

When I was a new trader, one of the biggest challenges I had was developing a consistently winning market timing strategy. It always seemed I was cutting my profits short in a bull market, while frequently being too slow to reverse to the short side of the market when the dominant trend of the broad market reversed. The end result of this dilemma was realizing too little profit on winning trades and suffering too high percentage of losing trades. As such, the math didn't work and I was a net losing to breakeven trader for several years. But eventually, through the school of hard knocks and learning from my numerous mistakes, I began to develop a winning trading strategy that enabled me to let the winners run, while also knowing the proper time to take profits before the inevitable reversals and pullbacks. Now, about 14 years later, myself and my team (Rick and Ed) possess a disciplined trading strategy that enables us to accurately time the market a majority of the time. That is why Morpheus Trading Group proudly sports a track record of proven performance that has outperformed the benchmark S&P 500 Index by a wide margin for the past 10 years.

When someone becomes a new subscriber to The Wagner Daily, our nightly swing trading newsletter with exact entry and exit points for our best ETF and stock picks, we try hard to make sure they understand our disciplined and proven trend trading system. For new traders, this can sometimes be challenging because the rules of our swing trading strategy sometimes go against natural human psychology (selling when the gut feeling is to buy or vice versa). But being a profitable trader means not following the herd mentality, as the herd is usually wrong. A good example of this can be found in the market's extremely bullish price action over the past several months.

For the past several weeks, for example, many subscribers have commented in our Live Trading Room, Live Q&A webinars, and via e-mail that the stock market is "overbought" and we should be taking profits on our stock and ETF swing trades. However, we have a system with clearly defined rules, and our rules had not yet given us a valid sell signal. Therefore, we remained bullish and continued entering new trades on the long side of the market. This was quite advantageous, as it resulted in allowing us to maximize the profits of our open positions and riding the trend several weeks longer than what might have otherwise been expected.

Now, our proprietary signals are finally indicating it is time to start tightening protective stops and scaling out of winning trades (selling partial share size), although I should clarify we have NOT yet received the necessary signals to become bearish and start initiating trades on the short side of the market. As such, we have been closing winning trades as the broad market has moved lower over the past two days.

Since we have been selling during a period of substantial weakness in the main stock market indexes, most of our ETF and stock trades are being sold below their recent peak prices...but that's okay! One of the biggest elements of our trading system is that we never try to buy at the bottom, nor sell at the absolute top. Rather, our primary focus is always to "catch the meat of the move," which is the part of the trend that affords the most potential profit with the least amount of risk. Once in a while, we get lucky by selling at the absolute top of a trend, but that is never our primary goal.

If the sudden weakness in the broad market manifests itself and intensifies from here, we will soon receive the necessary signals to first enter into a neutral (cash) bias, and subsequently begin selling short if the weakness persists long enough. Above all, it is crucial to understand your job as a trader is not to predict what the market will do next. Rather, your job is to "trade what you see, not what you think."

If you are already a subscriber of our newsletter, rest assured you're in good hands because we will continue profiting whenever the low-risk opportunities are there, but more importantly hold on to those profits by keeping you out of trouble while other traders and investors are giving back their hard-earned profits during the correction from the bull run. If you're not yet a subscriber, and are concerned about what to do if the market starts moving sideways to lower from here, we sincerely encourage you to give us a try. We confidently offer a complete "no-nonsense" 30 day satisfaction guarantee, so you've got nothing to lose. Furthermore, you may view our 10-year archive of actual past newsletters to get a better feel for our trading strategy.