Technical Analysis is a subject very close to my heart. I am very passionate about the way TA is used to find path of least resistance, creating a window of opportunity for traders. Such opportunity stays hidden till we get more confirmation and more we wait for confirmation, opportunity vanishes with the same speed.
All TA practitioners have their own analysis and come to a conclusion after extensive study of the charts. Their conviction is put to test on every trade they take and market decides if their expectation was in the right path. A good trader knows when market is proving his analysis wrong and adjust his trades accordingly. A new trader will find new reasons to hold on to his conviction to a point where the damage is brutal to his trading account.
Our eyes see what it wants to see and TA is an excellent tool to accomplish this with amazing effect. If a trader has a strong bullish conviction, he will come up with new analysis to support his views no matter how badly the scrip cracks. He will come up with new price levels that he hopes will be a turning point based on lines and indicators on different time frames to support his expectations.
Many novice traders believe that a clear set of rules is the answer. Follow the rules like a robot and have faith in the law of average. Initially the set of rules are kept simple and stupid. After a few bad experience, new rules are added to the trading plan. With time, trader adds rules to counter exiting rules to a point where the trader is afraid to pull the trigger after getting 4 SL hits in a row. Its only a matter of time, before he is back to the drawing board with a new set of simple rules and the process repeats itself.
We all have done this and we continue to do this. No one can pretend to be holier than thou in this matter. Only difference is, with experience, the changes to the rules are cosmetic and focus shifts to better risk / trade management.
I personally can get things right only 51% of the time. To me, luck plays a very important factor in deciding the outcome of a trade. My experience helps me in isolating when a trade is going bad and I have to tighten the stoploss or when a trade has potential to go the distance and i should give it wiggle room to mature into a monster. Sometimes, the comfort factor is not there and i avoid many trades.
On hindsight, every thing is crystal clear on what I should have done. I find that so many trades could have been handled better. So many missed opportunity and so many traded that i could have easily avoided.
I want to open a debate on this matter, is TA a science where the mind plays a pivot role or just an ART, which is open to interpretation as the heart see fit.
All TA practitioners have their own analysis and come to a conclusion after extensive study of the charts. Their conviction is put to test on every trade they take and market decides if their expectation was in the right path. A good trader knows when market is proving his analysis wrong and adjust his trades accordingly. A new trader will find new reasons to hold on to his conviction to a point where the damage is brutal to his trading account.
Our eyes see what it wants to see and TA is an excellent tool to accomplish this with amazing effect. If a trader has a strong bullish conviction, he will come up with new analysis to support his views no matter how badly the scrip cracks. He will come up with new price levels that he hopes will be a turning point based on lines and indicators on different time frames to support his expectations.
Many novice traders believe that a clear set of rules is the answer. Follow the rules like a robot and have faith in the law of average. Initially the set of rules are kept simple and stupid. After a few bad experience, new rules are added to the trading plan. With time, trader adds rules to counter exiting rules to a point where the trader is afraid to pull the trigger after getting 4 SL hits in a row. Its only a matter of time, before he is back to the drawing board with a new set of simple rules and the process repeats itself.
We all have done this and we continue to do this. No one can pretend to be holier than thou in this matter. Only difference is, with experience, the changes to the rules are cosmetic and focus shifts to better risk / trade management.
I personally can get things right only 51% of the time. To me, luck plays a very important factor in deciding the outcome of a trade. My experience helps me in isolating when a trade is going bad and I have to tighten the stoploss or when a trade has potential to go the distance and i should give it wiggle room to mature into a monster. Sometimes, the comfort factor is not there and i avoid many trades.
On hindsight, every thing is crystal clear on what I should have done. I find that so many trades could have been handled better. So many missed opportunity and so many traded that i could have easily avoided.
I want to open a debate on this matter, is TA a science where the mind plays a pivot role or just an ART, which is open to interpretation as the heart see fit.
