Friday, February 27, 2009

Trader personality


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As I have mentioned in previous posts, patience (or lack thereof) is one of my weaknesses. To be more precise, I have the patience to wait for a high probability chart pattern to fully develop. But once I do take a setup, I find myself impatient in waiting for the tape to move and/or continue in my direction. This impatience has often led me to exit the trade early for a small profit/loss. Keeping my losses small is great, but missing out on big profits doesn't feel so good.
What I wind up doing is trade the first thrust, and exit on signs of a pullback. When price pulls back after the initial first thrust, there are only 3 outcomes: continuation (ie. pullback reverses and continues on in the direction of the first thrust), reversal (ie. first thrust fails), or sideways chop. In the current market environment, the probability of a first thrust continuing on after the pullback is not that great.

So what to do about it? Perhaps I need to find a better spot and better time to enter the trade. Which goes back to the point of requiring more patience.
Also, I can also re-start the practice of entering support/resistance levels as alerts in my trading platform. Also wouldn't hurt to read up on what Dr.Brett has to say about this.

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