Alan Farley writes in his book The Master Swing Trader:
The perfect opportunity rarely exists. Learn to trade in shades of gray ... get off the sidelines and act when enough ducks sit in a row.Perfect patterns carry the greatest risk for failure ... look closely for failure when perfection appears.
It's counterintuitive. But it's true that the most beautiful divergence trade, or the "perfect" moving average crossover, can sometimes just flame out in a brilliant display of the power of the market to destroy your hopes. I sometimes step back when something looks "too good to be true," and ask myself, "am I getting wildly excited about this trade?" The ones that I think can't fail are generally the ones that once again prove that the charts are just a picture. Sometimes a pretty picture can be deceiving.
