Tuesday, June 17, 2014

Mixed Feelings

This is what happens with most of the traders at some point of time in trading - "Mixed feelings". They confuse themselves in taking decisions, wondering if they should wait or be long or short in market. And the reason behind it is they think too much and listen to others rather than themselves and do not follow a game plan.

         For example, if we talk about Nifty, it is in a choppy period right now. Now many traders may predict the up move is ending after a 1500 point rally(from 6000-7500) and a downtrend will start. While some traders may suggest that it is just a consolidation and market will pick up its momentum soon and make new highs again.

       My point is: why do we need to predict the future move, which always confuses us and most of time leads to a wrong decision. Instead, we should analyse the current market movement and enter the market according to our setups applied to the market.. If I talk about Nifty, than it is in choppy period(going higher and lower with big moves and closing near to last close) and choppy markets are sign of a trading range. The eventual breakout from the range with give a trend, either up or down. I would rather wait for the range to resolve itself in any one direction.

Traders are likely to get mixed feelings if they attempt to predict the future. Trading is about taking decisions according to our own rules. Our task is to develop rules that have a positive edge and then to follow them.