Understand what you are doing | stockbee

2/28/2014

Understand what you are doing


Understand what you are doing

Do not blindly do things, it will get you nowhere and you will run in circles.

If you look at any setup or scan or indicator and just run to duplicate it , it will not help you much because you do not understand what it is trying to do or based on.

Every setup has an underlying market structure logic. If you first understand that then you do not need others scan or indicators to trade that logic. From your understanding you can create your own scan.

First try and understand how market operates on different time frame. If you want to be day trader understand how it operates on that time frame and as a result of that what kinds of methods have evolved. If you understand that then you will know if you look a scans and methods of 1000 day traders there will be common element to what they are doing (no matter what jargon they use to make it sound more difficult to understand).

Market behaves in a particular manner on intra day basis once you understand that you can find several ways to trade around that behavior of market. Exact indicators, time frames, scans are small tactics to catch that structural phenomenon.

If you look at 3 to 10 day time frame, markets behave differently. Swing traders operate on understanding of the market structure on that time frame. They understand the market structure for that time frame. If you understand that you can create your own ways to trade the 3 to 5 commonly found phenomenon on swing trading time frame.

If you look at larger moves lasting months or years there is an underlying logic behind the moves and understanding that would give you ways to try and capture some of these moves.

As a beginner instead of running in circles focus your energy on clearly understanding the market structure and what traders do, why do they do it and how do they do it.

Effort involved in it is one time. And if you do not do that first nothing will work for you.

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