A) Technical analysis, fundamental analysis, moon phases and other demons are all aimed at finding a way to predict future market movements based on past quotes.
Therefore, all the techniques you can use to open a position are subject to a percentage of reliability. Some have a higher percentage and others have a lower percentage.
That is, when you open a position, you have x probabilities of success but never the certainty that it will be the operation you are looking for.
Therefore, and because trading moves in probabilities, you have no choice but to protect yourself against the operations where your entry will not be correct.
This is what matters and not the entry.
It counts how you manage the operation, how and how much you leverage, with how much capital you operate, where you put the stop, how much % you get right.....
So, both technical analysis and any other technique you base yourself on to try to enter correctly are just simple tools to try to make sense of the market.
But be clear about one thing, no matter how much percentage probability the technique you use has, it will not be enough to be a consistent trader.
What matters, I repeat, is the management.
B) If there is something I try to instill, in one article and another, it is that there is no and will never be an automatic trading system that yields results that make the trader applying them live in consistency.
Yes, there is a trading system, understanding this as rules to follow with discipline, but not a mechanical trading system that tells you every moment when to enter and when to exit.
Trying to force a market that is changing its mind at every moment under the yoke of a mechanical system resembles trying to fit all the water of the sea into a bucket.
I refer you to this guideline from Al Brooks that I recommend you reread before continuing to trade:
"Decide if trading is a hobby or a job. If it is a hobby, better find another one because this is going to be very expensive and dangerously addictive."
You will see, the traders who take money from the market are discretionary traders, those who operate with rules but without them, those who trust their management system, those who know that entry is not the most important even though it is the first thing we always look for.
You will have entries in the market from which you expected a great return and that you will close without having had any at all.
You will have entries in the market where you intended to earn just a few pips and, however, they turn out to be the most profitable.
With this, I want you to understand that not knowing what will happen in the future, the entry loses the relevance that everyone wants to give it.
I humbly recommend, based on my experience, that if you are "playing" with moving averages, backtesting, formulas, indicators, etc... that you set them aside and focus only on the price that reflects the quotation without many parameters in between. (I just gave you a shortcut and saved you hundreds of lost hours).
The more "things" you put into a chart, the harder you will make the operation and the more conflicting signals you will find.
With this, I want to tell you that if you have the RSI and the MACD, plus the moving average of the moment all together in the chart, you will find that the MACD is giving you a buy signal while the RSI marks bearish divergence, for example... etc, etc. The simple is what works because the simple is invariable. Always remember this.
And what can I tell you about the hair growth sellers? There have always been and always will be. The problem is with those who buy them.
A broker's salesperson just called me this morning from Switzerland offering to manage my money and selling me a return of 12%.
With 4 sentences that I told him, I almost convinced him to let me manage his... Therefore, believe in yourself, operate according to your beliefs, and accumulate hours.
Everything will come out on its own. What you can't expect is to arrive at the market and stuff yourself with money overnight.
Another very common mistake of novice traders is believing that one can make money trading without a prior and intense learning of many years.
It is a true insult to those of us who have been in this for so long.
And it truly saddens us that someone believes that with an automatic system, one of those that are also sold because the owner doesn't work and has to monetize it somehow, one can beat the market.
I don't know, but my brother who is an electrician didn't read any books and just started doing installations...
And my neighbor, who is studying to be a lawyer, buying the robe did not give him the right to practice as such...
Please, trading is a profession that takes a lot of sacrifice to learn, and one cannot expect to live off it after reading 4 books or after having been trading for a week in simulation.
How can people not get depressed? They approach the market without any knowledge because they've been told that one can get rich overnight and end up being plucked and wanting to throw themselves on the train tracks.
Take a plane and try to fly it without knowledge to see what happens.
It's something so obvious that I don't understand how people fall into these traps.
There is a saying that goes:
"Whoever wants to deceive will always find an unsuspecting person willing to do so."
So be very careful with what is moving out there.
