One common challenge in trading is dealing with bias. This occurs when you have a predetermined belief about the market’s direction and then tailor your analysis to fit that bias. It’s important to be aware of this when entering a trade, as maintaining a neutral perspective is crucial for trading success.
To combat this, a useful strategy is to recognize your bias when the price moves against it, regardless of the timeframe or the magnitude of the movement. Remember, price movements are driven by large institutions employing highly experienced and intelligent professionals. When the price moves against your position, even slightly, consider the possibility that there might be a counter-argument for the other side of the trade.
Ultimately, the goal of a trader is to follow the actions of these institutions, as they are the primary forces driving market directions through their long and short positions. Your objective is to leverage any knowledge you have to predict these movements and capitalize on them.
Quote of the day: “The fool doth think he is wise, but the wise man knows himself to be a fool.” ― William Shakespeare
Movie of the day: Yes Man (2008)
Song of the day: Fool Again – Westlife