As it turns out, trading is getting harder
In the 1970s, money could be made just by technical analysis, when "false breakthroughs" in technical analysis were rare. Now, almost everyone is a chartist, and there are a huge number of technical trading systems. It is these changes that make it harder to make money from technical analysis.
How to eliminate the trouble of fake breakthrough?
First, I have a much longer trading cycle than most traders because my trading strategy includes riding out periods of sharp price retractions. I offer an alternative approach. One trader I know who trades well in the futures market looks at how badly the stock market hurts most traders. It seemed to work for him.
Then, the more speculators pay attention to a certain price movement pattern and price pattern, the more likely it is to send a false price movement signal. The less attention a market receives from speculators and the less speculative activity it has, the more effective and reliable the price breakout signal in technical analysis is.
Finally, there are many people who make amazingly bad trades in order to cash in and take their profits. Even when market prices are capped by the daily limit and prices are almost certain to continue rising the next day, they close out of the market at the daily limit. They can't bear to keep profits on their books and they are eager to cash in profitable positions. When they finished out, I tried to come in and build positions.
State of mind! State of mind! State of mind!
To avoid a rush to turn over the psychological, do not as soon as possible to turn losses and investment or even double the investment to trade. I also realize that a loss of a certain amount can affect your judgment, so you need to take a break between the loss and the next trade to calm down and regain your composure.
In the 1970s, money could be made just by technical analysis, when "false breakthroughs" in technical analysis were rare. Now, almost everyone is a chartist, and there are a huge number of technical trading systems. It is these changes that make it harder to make money from technical analysis.
How to eliminate the trouble of fake breakthrough?
First, I have a much longer trading cycle than most traders because my trading strategy includes riding out periods of sharp price retractions. I offer an alternative approach. One trader I know who trades well in the futures market looks at how badly the stock market hurts most traders. It seemed to work for him.
Then, the more speculators pay attention to a certain price movement pattern and price pattern, the more likely it is to send a false price movement signal. The less attention a market receives from speculators and the less speculative activity it has, the more effective and reliable the price breakout signal in technical analysis is.
Finally, there are many people who make amazingly bad trades in order to cash in and take their profits. Even when market prices are capped by the daily limit and prices are almost certain to continue rising the next day, they close out of the market at the daily limit. They can't bear to keep profits on their books and they are eager to cash in profitable positions. When they finished out, I tried to come in and build positions.
State of mind! State of mind! State of mind!
To avoid a rush to turn over the psychological, do not as soon as possible to turn losses and investment or even double the investment to trade. I also realize that a loss of a certain amount can affect your judgment, so you need to take a break between the loss and the next trade to calm down and regain your composure.
