A beginner's guide to trading - Chapter 5

As a newbie trader everybody has doubts like, “Am I analysing the charts well?”, “Does my analysis skills are improving?”, “Have I changed my trading style?” etc... How to know these? By journaling you can know and measure your progress. Best way to journal your analysis is using trading view and publishing your analysis. You can publish as private ideas, if you don’t want others to see it. Since the charts are dynamic, any time you can check your analysis and the market movement after that.
Lets say person A has just started analysing and he use trend lines.
In the above chart when the price breaks the trend line he plans to go short.
The trend line break was good and gave good profit.
In the above chart the analysis was to go long when the price break the trend line.
After breaking the trend line the price went sideways. Very less movement only.
The price was falling and plan was to go long once the down trend was over by breaking the trend line.
The price gave break out upside, but did not sustain and went sideways.
Analysis 1 : good move
Analysis 2 : very small move.
Analysis 3 : No move.
Total – 3 worked – 2 Did not work – 1
Next step was to improve further. You can add conditions like volume support, current market situation.
Analysis 1 : Price was unable to break the resistance and was falling from resistance so we can go short.
Analysis 2 : Price was not having volume support to move up further.
Analysis 3 : Less volume and did not move up.
These observations you can do in live market only. First analyse, plan and be ready for market. Then during market hours, observe and trade.
After market hours check how your analysis worked, how you traded, what mistakes you have done in analysis and trading. Make this process as a
habit. If you did not develop this as a habit from the starting itself, then making it as a habit becomes a tough process. Journaling your trades help you to improve and measure your progress. Start today if you have not done it so far. Perfection comes from practise. Dont stress yourself by expecting perfection from day 1.
As a trader you have to make yourself ready to face the market, adapt the market and measure you progress. Remember you can trade better than you think, if you follow this process.

Roles I play here : Author, Analyst & Moderator.

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