As part of these nightly tweets that I do these days ... today:
THE BAD TRADER
The bad trader makes a series of generally known mistakes, today I will try to delve a little into mistakes generally less obvious to some traders 👇
1)The bad trader chases the price, always follows the price in the markets movements
2)The bad trader denotes excitement on the days when the market makes important movements, loses control over itself
3)The bad trader overreacts to market movements (generally bullish), leaning rapidly (see point 2) to movements opposite (generally bearish) to the important previous movement, usually with too optimistic (unreal) expectations
4)The bad trader, often, when the market goes against him, looks for absurd explanations to convince himself that he is right (understanding that he is probably wrong, it is not an option for him)
5)The bad trader, when the market shows him that he was wrong (usually long after when he should have realized it) doesn't analyze his mistake (this could be painful for his false self-esteem) he simply waits for the market (see point 1) to repeat the same mistakes
6)The bad trader is sometimes right (a broken watch gives the time twice a day). Perhaps this is the worst that can happen to him ... he convinces himself that the whole process (of mistakes) is correct, he will return to fall into his own trap soon
Try not to be a bad trader 😉
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Some explanations using the latest proposed bearish trade
Probably some traders do something similar, or will do it in another way, they may even disagree...
It doesn't matter, it is just my vision and I think it can be a help for other traders
(2/16)
CHART 1:
Simply the evolution of the trade and all the zones and indications proposed
Highlight Moment: When TP1 hit and price rapidly bounces, a common temptation is to expect a strong bullish momentum, in the session and in the medium term
Reality was very different
(3/16)
LOOKING FOR THE BEST POSITION
(associated risks)
➡️Option 1:
Too close to the bullish option, apparently better positioning, but more chance of failure
There is no significant reference level above
(Remember that for me, above 15760 DAX should reach 15850/900 easily)
This is a time when many of you think, after a 150 point trade (respecting my TPs), that you have to continue in the market ... some thinking about bigger falls, others about buying the bounce, right?
For me, here are three long-term psychological failures to be consistent:
➡️Overtrading
➡️Too greedy
➡️Chase the price
For me the main move is done, all TPs reached and the probable intraday buy zones have too much risk in this market situation (understanding the market context is very important, and very difficult too)
In fact, first buy zone is broken (15550),and the second is far away (15409)