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I talk to you a lot about the power of following patterns. Finding these trends is not something everyone has the experience, discipline, or patience to do. But they work because history tends to repeat.
It's like Isaac Newton's first law: Objects in motion tend to stay in motion… until acted upon by an outside force.
Think of it this way – a common New Year's resolution people make is to live a healthier life. The outside force in this situation could be a new book of clean recipes, or maybe a gym membership.
But the reality is that 80% of people break their resolutions by Feb. 1. Life settles in, and there isn't time to run on the treadmill every day or spend an hour roasting broccoli after work.
It's hard to introduce a lasting outside force. People often resort back to their original path – and the same is true for stocks. Stocks tend to return to their historical patterns.
With trading, we want to find the stocks that are in motion and haven't been hit by an outside force. And then we hop on for the ride.
About the Author
Tom Gentile, options trading specialist for Money Map Press, is widely known as America's No. 1 Pattern Trader thanks to his nearly 30 years of experience spotting lucrative patterns in options trading. Tom has taught over 300,000 traders his option trading secrets in a variety of settings, including seminars and workshops. He's also a bestselling author of eight books and training courses.