Over the past few weeks it feels like the market has become that extra degree more difficult – to me at least - and I have noticed an increase in what I perceive to be market noise. Market noise to me is news-flow in general, but mostly other traders calling tops and bottoms and handing out “I told you so” ‘s like it was free candy.
Sure, the other traders have been right more than I have over the past few weeks and I have no shame in admitting that. But allowing them to influence my way of thinking has never worked out for me in the past and therefore I doubt that it will start working out now. Not because they are wrong, but because my personal trading style differs from every single other person’s out there. I have been in the situation before where I copied the trades of a phenomenally successful trader, lost a ton of money, and watched as he banked profits on the very same trades I stopped out of. This was because his way of trading was vastly different to mine. Therefore I need to stick to my own method and rules and not allow outside influences to have an impact on my trading.
A few years ago someone told me that I should “trade with my eyes”. What this means is that you need to trade what you see in your charts and ignore whatever the news and other people are saying. If you have levels that you are trading, stick to them. Do not let the fear or confidence of others influence the way that you make decisions.
If you have been watching a setup develop over a few days or hours or whatever timeframe you trade in, do not allow the comments of others or what is being said on the TV make you either; enter your trade before you get a valid entry signal or, abandon the trade before it has confirmed a failure. Stick to your rules and trade the setup that you saw. Equally as important is that if you are in a trade, do not let others influence you to close early or, not close when you reach your target.
As a practical example; I was short ACL (Arcelor Mittal) with a target of R19.00 and I closed it early because I allowed myself to be influenced by someone else. I can’t blame anyone for this other than myself and therefore must take responsibility for it and learn the lesson made available from the experience.
Trade the charts, ignore the rest.
@TraderPetri
15 April 2015
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