Blockchain New to Technical Analysis? This is What You Should...

New to Technical Analysis? This is What You Should Know


Common Mistakes Traders Make

Technical Analysis or TA is probably the first thing newcomers want to take a deep dive into after they have joined the market. Some even see charts and patterns as a cheat sheet to help them beat the market if they can manage to learn them all. In reality, nothing is that simple, and here are the reasons why.

Swamped with Indicators

Indicators are often portrayed as magical tools that can foresee the market and price movements. With over 100 indicators available, inexperienced traders are eager to try them all and create an ultimate price-prediction tool on their very own computers. However, using too many indicators can have a counterproductive effect on your trading performance. Swamped with multiple indicators across the screen might make you look like a pro, but often than not – they will just end up causing you distractions.

As a matter of fact, some of the indicators are even contradicting each other. For instance, combining two of the most popular indicators, MACD, a lagging indicator, and RSI, a leading indicator, often gives bad results. Sometimes it is best just to have the ‘right tool’ than to have ‘all the tools.’

Looking for the Holy Grail

As mentioned above, inexperienced traders have a misconception of trying to find the all-in-one indicator or ‘the Holy Grail’. Unfortunately, it is too good to be true as the Holy Grail just does not exist. Every trade setups have their own pros and cons, and usually, only work in a certain set of situations. To be an excellent trader means being adaptive to the market and able to pick the right tool for the right job rather than to rely on one’s ultimate tool’.

Lessons no one teaches you

Traders sometimes solely focusing on the technical analysis and forget there are more to trading than charts and patterns. Here are some of the valuable lessons people tend to overlook.

The only certainty is uncertainty

In the open markets, nothing is certain as John Allen Paulos once said “Uncertainty is the only certainty there is, and knowing how to live with the insecurity is the only security.” Prices can move in any direction, there are too many hidden factors to be calculated. Any major news or unfortunate events can and will affect the price despite whatever your indicators are telling you. Oftentimes, veteran traders lose the game by putting too much trust in their trade setups.

Especially in the small, immature, and low liquidity market, there are always ‘Whales’ manipulating the prices of the market or asset. To outsmart those whales, traders will need more than trading theories or indicators.

Know yourself

Nowadays, there are many learning channels and ‘gurus’ offer to teach you the technical analysis – some are free, some are paid. Most people who have taken courses from those coaches or gurus often impose the learned techniques on themselves without realizing they might not be the best fit for them. Searching for your own style is very crucial – whether you are the trader, investor, or speculator – the only person with the answer is you. Mastering trading requires a lot of time and dedication. Most, if not all, great traders and investors constantly learn from their mistakes.

Free image/jpeg, Resolution: 1920×1280, File size: 478Kb, athlete jogging on an incredible sunset


Ultimately, as we all should already know, there are no shortcuts to success.

Latest news

Saudi Arabia plans a city without streets. These are its advantages

Saudi Arabia has just built a city ​​that has no streets. Just as you read it, the idea is a bit surprising,...

More than 20 military men injured in new battles between India and China

More than 20 military personnel have been injured in new clashes between India and China. India Today writes about...

The keys to Joe Biden’s style that you should imitate now (and how to do it right)

Joe Biden has risen to the presidency of the United States and speaks of a new era in the politics...

The WHO estimated the data on the increase in mortality due to the “British” strain of COVID

WHO expert suggested coronavirus mortality may rise due to overloaded healthcare system, and not just due to the emergence...

41 Best Chat Applications for Managing Distributed Teams

Why far off group talk applications?  Correspondence shapes the most vital component in group achievement. Given the inconceivability of expressing...

Tokyo 2021: everything you need to know about the Olympic Games in Japan

Tokyo 2021 will be a very different sporting event. The Olympic Games that will be held in Japan had to go through their date for...

Must read

You might also likeRELATED
Recommended to you

%d bloggers like this: