You can always talk yourself into any trade

FX:EURCHF   Euro / Swiss Franc
You can pull up any chart and you can easily come up with 100% legit reasons to either buy or sell the same market.

What do we see? Is this a cup and handle and time to buy or is price struggling to break resistance and we should sell? The 1H shows already the start of a downtrend. But the Daily shows a new uptrend. The RSI is pointing down but the FIB resistance is holding. We have a lower timeframe divergence but the STOCHASTIC is suggesting more shorts. The 8H timeframe shows a beautiful supply zone but the 3H timeframe gives us an almost breakout.... The EURO suggests mort short bias but risk flows could change the picture. What will the ECB do? When will the SNB step in?

You have so many tools, patterns, concepts and data points at your disposal that whatever narrative you want a specific chart to show, you can make the case for it. Technical analysis can be very subjective if done wrong.

As a technical trader, thus, it is SO important that you specialize in a few selected setups and you do not deviate. Talking yourself into random trades, convincing yourself to leave that losing trade on or coming up with reasons why it's suddenly OK to do something completely different is easy as a trader. We can always come up with excuses that sound good in the moment.

If you want to make it as a trader, you must have a solid approach, you must be clear about what trader you are and you cannot leave any room for interpretation when it comes to executing your trades.

  • Create CLEAR rules for how you analyze a market
  • Be clear on which timeframes you trade and do not drop lower to "fine-tune" a trade
  • Collect screenshots of your best trades and put them right next to you. It will help you be clear about how good trades look like
  • When analyzing past trades, if you see that your trades do not look identical, you made a mistake. As a technical trader, all your trades should look the same
  • Tune out the noise from other traders an do not ask for opinions or ideas. Focus on yourself and your rules
  • If the price hits your stop loss, get out. Do not look for people who confirm that your trade is still valid
  • Learn to be OK with trading less
  • If you cannot spot a trade after looking at a chart for 10 seconds, there is probably no trade. The good trades will jump at you
  • Do not risk too much just because you believe that a certain trade cannot fail. Even the best setups will fail repeatedly

I have been trading for 15 years!

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Excelent post Rolf! Its hard to accept that, but its the only way!!
Hi Rolf, your opening posit is so true. It's how I approach a market and get so confused ALMOST every time, and almost every time get it wrong; very disturbing. The advice out there runs the gamut of all of the things mentioned, and all saying "NO", this is the way it should be done. If, in fact, your suggestion to stay on 1 time frame for analysis and trading is correct, it would certainly be a more straight forward approach. The inclination to get a peek as to what is going on by going lower is a distraction, but seems on the surface to provide value....maybe not. From today I am going to stick with 4H and, based on your suggestion, find 3 or 4 setups that I can easily see and logically process.

Slightly different topic: I found a sort of Traders Personality test some time ago to help a person pinpoint/match their personality to a trading style and time frames. It said I was a cross between Swing and Day trading, which seems right to me, based on the narrative. That puts me somewhere in the 4H/Daily, but looking for results by the end of the Day or two. Anything faster or slower would probably bother my psyche. What do you think about that?
thats a lot of words to have no opinion whatsoever
You are the best hindsight trader ever #waste of space
+1 Reply
Very true, what you are saying is 100% the truth!
Comment removed.
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