Thread by @ColdBloodShill

*THREAD*

The importance of not looking at charts.

Despite feeling the need to look at charts consistently it's incredibly important to learn to step back and not spend too much time on them.

Depending on the type of trader you are, or aim to be, it could be detrimental.

The need to look at charts all the time is caused by a couple of things:

1. Use of high leverage/overexposure of account - basically your size is way too big and you're micro managing your PnL to try and stay alive and ensure you don't suffer a huge loss.

2. Addiction. Yeah, unfortunately you're probably addicted, it's become a mechanical response to any downtime you have in life. Toilet > Charts. Boiling the kettle > Charts. Cooking your pasta > Charts. Wake up > Charts.

You've conditioned yourself to look at charts regularly.

Looking at the charts causes some strong effects, both from an actionable trade perspective and a reactionary perspective.

I'll cover those off now.

1. When we look at the charts, usually on LTF, we can very quickly provide ourselves with confirmation bias, we see a big spike up in price and we say "shit got to get long right now" - we are reacting to one candle on LTF at the moment we look at the charts.

2. You sit and watch the charts on LTF and you will make decisions and change your HTF plays based on the 5m - 15m charts.

"Oh shit big red candle, looks really bad, close my position quickly and bank this profit!"

What typically happens in this scenario is that the next 5m or 15m candle will bring us straight back up, you zoom out to the 1h and there's a big fat wick and you closed out your probably decently positioned entry at the bottom.

Do you ever think: "If only I wasn't actually looking at price during that moment, I wouldn't have reacted and I'd still be sat comfortably in my position."

It happens pretty regularly. Overexposure to charts > increased tendency to make impulsive decisions.

Set your invalidation, manage your risk, step away, there's nothing left for you to do.

You have to let things unfold and play out, the majority of the time people I've had experience with are often correct in their analysis, but their execution and management is poor.

Now, of course you have to spend time on charts to find your entries, learn, get exposure to the market and the way it moves. BUT there comes a point you have to hold your hands up and say "there's nothing else I can do here except wait."

If you're scalping, you'll need to be more active in your management but at the same time you don't want to be reacting on individual candles (rarely anyway) - sometimes even just the animation of a candle chunking down is enough to force us to panic close.

Next time you're in position, try to resist the urge to consistently check price. Remove the temptation to close your position. Manage your risk, don't get overexposed and let the price action do the work for you.

There are very few times you'll look at the chart and make a GOOD decision within the 30 seconds you have TradingView open.

Battling the addiction is harder than you think. But the results of taking action will be noticeable.