When nosotros focus on predicting marketplace moves together with trading our views alongside conviction, trading speedily becomes a game of the ego.
When nosotros declare that nosotros convey a certainly trading "style" together with nosotros hold back for marketplace weather condition to conform our style, trading becomes ego-based.
When nosotros obsessively sentry screens together with focus on each displace of P/L, trading turns into an ego game.
We tin purpose every technique nether the Sun to instill champaign of written report together with overcome emotions, but if nosotros pursue trading through the ego, nosotros volition survive vulnerable.
An analogy I've used inward my books is the expert dancer on a trip the low-cal fantastic floor. The expert dancer doesn't merely trip the low-cal fantastic his or her manner regardless of the music playing. The expert dancer does non laid out dancing ahead of the music, anticipating the side past times side tune. The expert dancer waits for the music to start, catches the crunch together with tone, together with dances accordingly.
In my recent trading, I've been taking ego out of the picture. I examine a stable lookback menstruation inward the recent marketplace together with position 2 things:
1) Has at that topographic point been a dominant tendency over that period?
2) Have at that topographic point been 1 or to a greater extent than dominant cycles over that period?
If I tin divulge no clear tendency or cycles, I don't trade.
If at that topographic point is no trend, but a dominant cycle, I merchandise the hypothesis that this cycle volition conk along into the immediate futurity unless I run across clear changes inward marketplace volume, volatility, intelligence events, etc. That has me buying prospective cycle lows together with selling highs. In that regime, I aspect similar a value trader.
If at that topographic point is a distinct trend, but no clear cycle, I purpose the laid out pullbacks/bounces inward the NYSE TICK to displace into together with ride the trend, over again unless I run across clear bear witness of changes inward the market's trading. In that regime, I aspect similar a momentum investor.
If at that topographic point is a distinct tendency *and* 1 or to a greater extent than dominant cycles, together with therefore I am using the cycles to guide entries together with exits inward the direction of the trend. In that regime, my execution is counter-trend (value), but the overall thought is trend-based (momentum).
We endure when nosotros hold back markets to merchandise the agency *we* desire them to trade. There are valuable tools that help us position cycles together with trends. That enables us to bask the market's trip the low-cal fantastic music--and net income from it.
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