Technical analysis can give you a huge leg up if you know how to read things. One big issue with traders is bias. They get the idea that price is going to go one way or the other and they draw their strategy to fit that model. But what if the trade goes the other way? Are you ready? How are you preparing to reverse your strategy?
Like A Boy Scout, Be Prepared
The one big thing I have learned about trading is that you have to keep emotion out of it. The market doesn't give a rat's butt about your feelings or intuitions. It's going to do what it is going to do. So you have to prepare yourself for any situation.
You have to create a trading plan and stick to it. This includes preparing for a move up, or a move down. Heck you even need to have a plan for any sideways action. But we are going to focus on the main moves.
Patterns and Indicators Don't Tell The Future
They only tell you where the markets have been and give you an indication based on past experiences on where the market could go. So there is not set in stone methods. Like I say all the time, you have to take the data as it comes.
So like in my chart example above, I am pretty confident that we will see a breakout move to the upside. I am also going to wait on my trade entry until we have a break out and then a retest of support. Then, I am still looking for more upwards momentum to confirm the trend reversal. That is when I am going long on the trade.
But, things could go the other way. I mean we are in a bear market and you need to play the trends. With this in mind, I am also preparing a short trade if things go south. So if ADA gets rejected and moves to the downside, I will be watching for a bearish break of this pattern, then a retest of resistance. If that happens, I am opening a short trade and will ride it down to my targets that I have set, based on previous market structure levels.
Leave Emotions At The Door
As someone who has been known in the past to be a bit of a gambler, I have learned that you have to take emotions out of the trade and really just trust the data.
If you are playing a longer term trade, as in something you are not going to be sitting and watching, then it's best to make sure to set a good stop loss and take profit levels. This way the trade just does its thing, and you do yours. I mean don't just leave it alone, it's good to check as the trade is in play for areas where you can raise your stop loss if you are in profit so that you can make sure you are locking in profits in case of a swing. But really just go with your game plan. If the trade goes the wrong way, well that's why you have stop losses.
If you get stopped out of a trade, that's when you start looking at the other direction. So if your long trade goes south, learn to quickly be able to spot bearish patterns and find a good entry on a short trade.
You can't force the markets to go either way, so you have to have your EGO and emotions in check before you even go into the trade.
NOT FINANCIAL ADVICE
Never am I giving financial advice, I am a student along with the rest of you and just trying to share what I am learning along my journey. Be safe and secure in your investments, and never trade or invest more than you are comfortable losing.
Until next time, make sure to go check out https://coin-logic.com and you can use my research site I really created for myself as an all on one crypto research tool!
Be Cool, Be Real, and always Abide!
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