Brothers, after years of trading, I’ve noticed something really interesting.
It’s not that people don’t understand technical analysis.
They know how to read MACD and moving averages. They can talk about head and shoulders, W bottoms, double tops and double bottoms more expertly than anyone.
But when it comes time to place their own trades, they become a completely different person.
The daily chart is clearly still in a downtrend, but they see one big bullish candle and think the bull market is back.
The upward structure has clearly broken down, but they see a MACD golden cross and start imagining an immediate reversal.
What’s the most interesting part?
When the market goes up, they think their technical skills are amazing.
When it goes down, they think the market makers are targeting them.
😂
After studying technical analysis for so many years, I’ve come to believe more and more that:
What really matters isn’t how many indicators you know, but whether you know which strategies to use in different market conditions.
There are strategies for trending markets.
There are strategies for ranging markets.
And there are confirmation signals to look for in a reversal.
If you use a trend-breakout strategy in a ranging market and keep getting stopped out, isn’t that to be expected?
Some traders see a bullish MACD divergence and immediately go all in on a bottom-fishing trade.
Then the divergence happens again, and again.
Before long, their account can’t take the hit.
Why?
Because weakening momentum doesn’t mean the trend has already reversed.
For a genuine reversal, you also need to see whether the price structure has changed.
I’ve always believed that:
The greatest value of technical analysis isn’t turning you into a fortune-teller who can predict the future.
It’s helping you know in advance:
When a trade is worth taking.
When you have to admit you’re wrong.
When you should stay out of the market and wait.
Trading isn’t about who knows the most indicators. It’s about who can stick with an effective method over the long term.
Anyone who’s been trading for a few years should understand this better and better.
It’s not that people don’t understand technical analysis.
They know how to read MACD and moving averages. They can talk about head and shoulders, W bottoms, double tops and double bottoms more expertly than anyone.
But when it comes time to place their own trades, they become a completely different person.
The daily chart is clearly still in a downtrend, but they see one big bullish candle and think the bull market is back.
The upward structure has clearly broken down, but they see a MACD golden cross and start imagining an immediate reversal.
What’s the most interesting part?
When the market goes up, they think their technical skills are amazing.
When it goes down, they think the market makers are targeting them.
😂
After studying technical analysis for so many years, I’ve come to believe more and more that:
What really matters isn’t how many indicators you know, but whether you know which strategies to use in different market conditions.
There are strategies for trending markets.
There are strategies for ranging markets.
And there are confirmation signals to look for in a reversal.
If you use a trend-breakout strategy in a ranging market and keep getting stopped out, isn’t that to be expected?
Some traders see a bullish MACD divergence and immediately go all in on a bottom-fishing trade.
Then the divergence happens again, and again.
Before long, their account can’t take the hit.
Why?
Because weakening momentum doesn’t mean the trend has already reversed.
For a genuine reversal, you also need to see whether the price structure has changed.
I’ve always believed that:
The greatest value of technical analysis isn’t turning you into a fortune-teller who can predict the future.
It’s helping you know in advance:
When a trade is worth taking.
When you have to admit you’re wrong.
When you should stay out of the market and wait.
Trading isn’t about who knows the most indicators. It’s about who can stick with an effective method over the long term.
Anyone who’s been trading for a few years should understand this better and better.