This is a classic mistake that everyone makes. Of course, making a profit is extremely exciting. When your command says 40%, your brain secretes some excitement enzymes, blood rushes through your veins. You will want to make more money, and be able to dive into the next trade.
Or conversely, when the market goes against your orders, fear begins to rise, sweat pours out, heart races. When Stop Loss is sticky, the possibility of frustration is high. And if you're angry, you'll want to remove it, want to enter another command to be less annoyed.
Before you realize it, this type of trader will usually go in and out of the market 5 times a day, burning a ton of trading fees and interest on margin trading. Worse, the more in and out, the more losses, because many orders, the "quality" of each order will not be high.
_It's all about emotions, learn to control your emotions and you won't need to go in and out of the market too much. Try not to look for small waves, especially if you are new to the market. Aim to get in and out of the market a few times a week, preferably several times a month (doesn't apply to margin trading).
For starters, medium and long-term price movements are easier to spot and also healthier. You don't have to look at the daily chart to put more stress in your head. And even seasoned traders want that goal: consistently profitable without having to look at the chart too much.
This may seem like a lot of talk, but bottom fishing seems to be preferred by many Traders, as it demonstrates the so-called "brave".
In trading, no one is brave. There are only losers and winners, winners and losers. And bottom fishing is the fastest way to a loss. As experienced traders often say, the trend is your friend. So respect the trend, as well as your friends. In a downtrend, we Sell, not jump into Buy. Catch a knife with a punctured hand.
Wait for the downtrend to break, and the uptrend to form. At this point, we wait for a gentle pullback to enter Buy, the probability of winning will be higher. Eating only the body is good, eating the head is full of hair, eating the legs is all dirt.
Do you think that learning all the price and candlestick patterns in the world will make you profitable? The problem becomes clearer when you realize that the pattern is just a "passing rain", and that the number of times you correctly guess the pattern is always higher than the number of wrong guesses?
_You find the indicators very attractive and true, so you want to add as many indicators to the chart as possible, to filter out false signals. In addition, you also want to identify candlestick patterns to predict the reversal as soon as possible. You also want to know about Ichimoku, about Fibonacci, add Price Action and Elliott to complete the set. More and more you will get deeper and deeper into the knowledge pile, and you will not be able to find the most suitable one for you.
It's better to keep things as simple as possible. Just learn the basic models, but learn them well, so that the probability of correct pattern recognition is higher. And don't add too many Indicators to the chart, choose MA/EMA and an oscillator like Stochastic or MACD, RSI. That is enough. Pay more attention to trend, support and resistance, price channel, trendline, volume. That is enough.
You know the story "the fortuneteller sees the elephant"? Looking at the pattern is similar, we think that price is forming a bull flag, but that is only part of a larger head and shoulders pattern, and your bullish expectations will go bust. by this head and shoulders. And there will be times when you try to convince yourself that the price is forming this pattern or that pattern, like trying to fit a puzzle piece into the void.
The key here is that the patterns in the short time frame will be very prone to bankruptcy. Let's focus on analyzing patterns on higher frames, and long-lived things like price channels, trends, support and resistance. Price will respect these factors, rather than respect a certain model that you imagine.
It is undeniable that technical analysis has become an indispensable tool for retail traders in most financial markets. Even in mutual funds, it still plays an important role. However, it is also just a tool, and it alone cannot bring you profits.
It is not a path to profit, nor is it a useless tool. It is something in between, something that can help you make a profit. There was a time when I stared at the 5-6 day chart continuously and started to feel like going crazy. When I entered the order, my heart was still beating and sweat was still pouring out despite being quite confident in my analysis.
Analysis is only one part, trading is also a game of emotions and capital management. If the analysis is correct hundreds of times and still being influenced by emotions, or if the capital management is not tight, it will still lose.
This is the worst error. It happens when you're at your peak and start to think you're great.
_Maybe this depends on the trading style of each person, but for me, the stop loss is always a pre-set limit order. There are many of you who don't like stop loss because you want to avoid the stop hunts of sharks, but in my opinion, letting the price run freely without insurance is even more dangerous, and stop hunting is really painful. , but not always.
_As for the Take Profit order, you can set notifications on your phone, using the TabTrader app available for both iOS and Android. Most profitable trades can be closed this way, it is better to take profits without time than to cut losses in time.
Trading is not gambling. Get the thought of playing all-in out of your mind. If you put all your capital into 1-2 coins in 1-2 trades, you are playing with fire. It sounds very obvious, but this mistake is really easy to make, the story usually happens as follows:
You spot the first price reversal. A coin that lost 50% of its value over the past 1 month and now it looks like it is trying to bottom and bounce. You analyze the chart yourself and see that it is, go to Telegram according to the Leaders, they also scream this coin is about to pop. You put in it about 5-10% of your account, and then it pops up too. It's so good, you start to think I should have put a lot of capital into it, now there's a ton of profit. And that is what you will do in the next bet. You put 100% of your capital into a certain coin.
Maybe it pops up 1 or 2 times. But suddenly it doesn't turn on anymore. Maybe due to some bad news the US banned Bitcoin for example. Or Binance was hacked and lost all its capital. Suddenly the price turned down. You will lose a lot.
Get used to and have fun with small profits. Don't risk it all on a single chance. The market still has a lot of opportunities but your capital is not very much. Start small, accumulate gradually to become big.
Do you know the story of the Tortoise and the Hare? Trader will be the same, Trader tortoise will be profitable in the long run, Trader rabbit will lose money.
The faster you make money from the market, the faster the return. But if you stick to a strategy that works for you, keep it simple and strictly follow your rules, you can make money trading. It's not easy, but it's doable. And if you stick to the market long enough, you might even be consistently profitable.
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