Thursday, June 29, 2006

What makes trading so difficult


Look at the chart below.

Globetrader_61

Everything in me tells me Go Short, while I should be looking for Longs. If it's the other way around the chart going from upper left corner to the lower right one, I look for Longs, while I should be taking a Short.
There is just 1 Top in the Trendmove above to go Short, but there are numerous opportunities to add to a Long. So why am I still looking to Short it, before the time is ripe?

2 comments:

Student Trader said...

So what is the answer for those false signals? Why would you NOT trade them?

Globetrader said...

As long as the trend is up, you take long signals only, regardless what your gut tells you. (And if against everything you learned you take a short signal you better be prepared to Stop-Reverse or use a TAS)
(I don't have to tell you, that the long trend on FTSE continued for another 100 points or so after the FED and the day after)