While the caption of this piece may come across a lecture on morality, remain assured, it is not so! The object of this article is to make you a better trader and help you form "profitable trading habits" that will work with you during bull and bear markets. A few are techniques in financial management and some are out and out mind over matter points.
It is said that the first impression is the lasting one; the same goes for stock market trading. Our first experience invariably determines our attitude and aptitude for trading in our later years. Behavourial scientists concur that traders tend to get comfortable with any technique that makes them money, not caring to probe whether the same is an "all weather" system or just beginners luck!
So, many a trader tries an amateurish black box, and if (un) fortunately, he makes money, winds up incorporating it as a core "system". Many loss making trades later, the same system is discarded as useless junk that it actually was. Before you experiment with any such fallacy and form it into a loss making habit, read on….
Trodding the beaten path
For most beginner level traders, it takes months if not years to get a hang of interpreting and thereby profiting from market signals. At such a formative stage in ones trading career, it would be a folly to tweak around with systems created by veterans.
Most beginners get enamoured by the exotic oscillators and invariably wind up creating basic systems that trigger buys/ sells based on an oscillator turning upwards/ downwards.
Compared to the price chart (which looks simple like curry and rice), oscillators tend to look like exotic Italian fare. The infatuation with oscillators is therefore natural. But what is quickly forgotten is that oscillators are derived from the prices themselves and cannot be used to forecast the parent. Can you wag a tail to shake the dog?
Source: Internet
No comments:
Post a Comment