A good analyst and a good trader are normally poles apart in their mindset. The major difference is how much "being right" features in the priority list. They both handle the randomness very differently.
Analyst tried to define the market direction with reason that is interpreted from historical price data. A trader uses the same data but is looking for low risk - high probability entry. He has flexible view and doesnt mind being wrong and normally targets smaller stoploss and has no issues with re-entry.
An analyst will normally assign a lot of worth to his views and will average his losing trades and find new reasons to hold on. A trader will cut his losses and will normally have flexible targets. Every new bar is a reason to review his position in hand and will normally be the one to add to his winners.
The problem with learning too much TA is that we tend to be more of an analyst than an good trader.
Recently, i have been experimenting on letting my winners run and it was very tough on me. I have always been the chiller collector. My belief was that its easier to gain 4 trades of 12 point profit than getting a single trade of 50 points. There were instances when i was in profit for over 2 hours and a single spike would scratch the trade. It really hurt like hell. But the few winners that ran made up for all the loosers. But once i learnt to ride the profit, there was lesser instances of market not giving an entry when it made a mad rush. I was normally in the trade and instead of looking for entry, i was finding new reasons to hold on.
Its a matter of mindset. One thing i admired about flow traders is their ability to be lazy bums and avoid trading when market is in the D area. When market is sideways, i normally see ST da chatting and having a good time with everything other than trading. When he is in a trade, he likes to concentrate and avoids detraction like a plague. All a good trait of a good trader...!
Analyst tried to define the market direction with reason that is interpreted from historical price data. A trader uses the same data but is looking for low risk - high probability entry. He has flexible view and doesnt mind being wrong and normally targets smaller stoploss and has no issues with re-entry.
An analyst will normally assign a lot of worth to his views and will average his losing trades and find new reasons to hold on. A trader will cut his losses and will normally have flexible targets. Every new bar is a reason to review his position in hand and will normally be the one to add to his winners.
The problem with learning too much TA is that we tend to be more of an analyst than an good trader.
Recently, i have been experimenting on letting my winners run and it was very tough on me. I have always been the chiller collector. My belief was that its easier to gain 4 trades of 12 point profit than getting a single trade of 50 points. There were instances when i was in profit for over 2 hours and a single spike would scratch the trade. It really hurt like hell. But the few winners that ran made up for all the loosers. But once i learnt to ride the profit, there was lesser instances of market not giving an entry when it made a mad rush. I was normally in the trade and instead of looking for entry, i was finding new reasons to hold on.
Its a matter of mindset. One thing i admired about flow traders is their ability to be lazy bums and avoid trading when market is in the D area. When market is sideways, i normally see ST da chatting and having a good time with everything other than trading. When he is in a trade, he likes to concentrate and avoids detraction like a plague. All a good trait of a good trader...!
