Tools Part 1
Awareness is the key to everything.
The key to profitable trading is discipline. Nothing else matters more. If you want to maintain consistent profits, you have to accept that you’ll lose trades, make mistakes, along with winning trades and big wins. All you have to do, is set specific rules, and exit any and all plays as soon as the hope factor takes over. Hoping to get back to break even, when back at break even, hoping that it’ll continue, if you let your decisions be guided by that, you’ll take big losses and risk going full tilt. Hope is the account killer.
Awareness is the key to everything. Knowledge and experience give you awareness. You build awareness through screen time and continuous execution. You’ll learn to recognise certain candlesticks and patterns, and you’ll know from experience what those combinations imply. Formations, EMA setups, liquidity pools, there are so many tools that can alert us to protect capital or take a risk. Without a broader understanding of price action, it will remain harder to navigate the markets. The market challenges us, time and again. Fear of giving back gains can make you exit early. Fear of uncertainty can make you hesitate to click the button when you should.
Even when you have your setups, edges, rules and discipline, there are specific moments where we get tried, all of us, even experienced traders. It is during these times that the 'Vegas Element' tries to seduce us into gambling. Then and there, we have to make the difference. We HAVE to stick to our system, but the psychological aspect can be tough. For some, more so than others, but trading psychology is a huge part of our performance. Therefore, increasing our awareness will increase our ability to make informed decisions throughout each session, helping us fight any form of fear we may have to face.
That said, when studying other forms of technical analysis and price action, it is important not to let yourself get tempted to abandon the system that you have been building. So with that in mind, here are a few tips and nuggets that help me along the way.
In this article:
The EMA50 Push
Higher Timeframe Wicks
Balance Zones
Contraction versus Expansion
Reversal Pattern