Just some thoughts when I am having my morning coffee in the rainy Melbourne.
Trading the Chart?
How should a trader use a price chart? This is just another question without an answer. Some traders claim themselves as “chart trader”. Yeah, give him a chart, he can trade his ass up.
Thinking in this way. We trade our view or opinion about the market. Trading, particularly, currency trading in my case, we are speculating. Yup, it is all about speculation. It is speculation, because you, in fact, nobody, know for sure which way the market is moving. Regardless of the time frame, you are trading off, you are trading your own opinion.
So, I know I am speculating. I know the price won’t necessarily reverse when RSI is over 70/30 or the MACD is crossing over some magic lines. Then what?
Forming your opinion. Explaining to yourself why do you think Dollar sucked, and you should short it.
I am talking about your own opinion, not the one from the talking heads on CNBC/Bloomberg or DailyFX.
Face it, there is really no expert in the trading industry. There are just a bunch of people who know more jargon, reading more news, and writing more craps than you do. Disagree with me? That’s your problem.
Now use the price chart as a roadmap.
So, you have formed your opinion. Cool. But do you know where you are? You gotta know your current location before start driving to your next destination. Here is where the fancy technical analysis comes in. Start confusing yourself with the trendlines, CCI indicators, pivot points, or some chicken indicators.
That’s part of the process. And nothing is wrong with that. As long as you are convinced, and you know where you currently are, and where you are heading, they are all good.
Stop or being stopped at some points is just part of the game. We evaluate , and decide the next move. Well, at least, that’s how I trade.
Crap, I think I talked too much today. Enjoy your weekend.