Namaste to all 🙏
Here I am assuming that after reading my weekly analysis blogs on various financial assets, you must have understood how to create a trading strategy just by analyzing the price action in a simple way. However, analyzing price action is not the only way to create a setup, but since most indicators simply reflect the data derived from the price behavior, I give the most importance to the price. #BhavBhagwanChe
Image by jcomp on Freepik | Edited on Canva
So let's learn something new about trading today besides analysis.
Here I have a question for you. Everyone may have different strategies before creating a position. Like I make a trading strategy based on accumulation and distribution zones by analyzing price action.
But my question is, how do you ensure the price moves in your favor after a position is opened? And what exactly do you do once the position is open?
Well, what most beginners do is they constantly stare at the changes happening in the P&L (Profit and Loss) section. This seemingly small thing can have a profound impact on your trading mindset. Yes, especially if you do short-term trading then you will agree with me that your anxiety level increases when you keep looking at the P&L section, and due to this your ability to think, understand, and make the right decisions at the right time becomes weak. Which ultimately leads you to incur losses by ignoring your initial trading strategy and setup.
So what should you do at that time?
The first thing you need to learn is to trust your analysis and strategy. Some people also consider trading based on others' suggestions and tips as a strategy. I don't completely agree with this, but let's accept for once that this is also a kind of strategy, still, you have to learn to trust that strategy of the strategist. Believing in analysis makes you more confident. Risk comes from not knowing what you are doing.
If you have a strategy, whether it is yours or someone else's, then you will definitely have the exact levels of entry, target, and Stop Loss. Meaning, that you will know at what price you have to take an entry, and then at what price you are likely to make a profit, and if for some reason the strategy fails, at what price you have to exit with minimum losses.
So after your entry order is executed, instead of looking at the P&L section, you should keep an eye on the price action as the changes happening there can help you learn a lot.
Because most indicators simply reflect the data derived from the price behavior. So if you learn to read price action, you will be able to make your own analysis based on your trading style.
And if you trade part-time that too with a long-term view then you do not need to monitor the price action either. If you know all your levels. simply place target, and SL orders in the same way as you placed buy orders, and simply close your system and sit back. If your analysis is correct then your targets will definitely be hit.
This approach is also not bad but only for those who do not see trading as a career and those who like to do long-term trading/investing.
I hope you have learned something new and better from this blog. If yes then vote for this blog and don't forget to share your views on this.
Thank you for reading this blog.
आज के लिए बस इतना ही।
"Keep Learning, Earning, Growing, and Smiling"
🙏
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