Understanding support and resistance is crucial in trading, use different tools to identify these levels.
Separate long-term and short-term positions to avoid making impulsive decisions based on market sentiment.
Clearly define reasons for entering a trade, stick to your plan, and avoid impulsive trades based on external factors.
Deep dives
Importance of Support and Resistance in Trading
Understanding and identifying support and resistance levels on charts is crucial in trading. These levels can be determined using various tools such as fib levels or moving averages. Focus on learning how to draw support and resistance lines in different time frames that align with your trading style.
Separate Long-Term and Short-Term Positions
Avoid mixing your long-term and short-term positions in the same trading account. Create separate accounts for your long-term investments and short-term trades to avoid making short-term decisions based on current market sentiment.
Plan Your Trades and Stick to Your Strategy
Before entering a trade, clearly define your reasons for doing so and state them out loud. Stick to your trading plan, including entry and exit points, and avoid impulsive trades based on external factors. Discipline and adherence to a well-defined strategy is key to successful trading.
Focus on Learning and Practicing Chart Patterns
Devote time every day, around 15-30 minutes, to reviewing and analyzing charts. Learn to identify chart patterns and practice applying technical analysis tools. TradingView and YouTube provide valuable resources for learning technical analysis.
Avoid Trying to Time the Market
Rather than attempting to time the market's bottom or top, focus on the potential value of a stock at its current price. Accept that you will not catch the absolute bottom or sell at the peak, and instead, base your decisions on the company's fundamentals and valuation.
Click here for Zee's interview show notes: https://tradingnut.com/the-traveling-trader-zee/?r=pod
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