One of the common mistakes among newer traders is the idea that a good chart reader must be able to read ANY chart - that is, be able to create trading scenario, analyze odds and so on. They tend to be surprised by "I have no idea" answer when ask an opinion about certain situation they are interested in. Yet this is my fairly frequent answer - and I don't hesitate to give it when I see nothing recognizable in the chart I am shown.
You see, trading is not about being able to trade each and every movement. Trading is about to be able to pick the right opportunity - right in terms of YOUR trading approach, right in a sense of YOUR ability to read and understand the movement and right in a sense of fitting YOUR risk and objectives profile. What good a perfect breakout chart to you if you are a reversal trader, specializing in trend change setups and having little knowledge of and experience with trend continuation? It's not unlike a hunter who sits patiently in his hide waiting for his prey, waiting for the right moment and acting only when everything is in place for a successful shot.
Then there are situations which present no or almost no opportunity for anyone, whatever their trading style is. If the chart is a mess with no pronounced levels, no volume clues, no clear configurations - it's safe to assume that we are facing an uncertain situation where nervous traders flee the risk, don't commit and engage very carefully if at all. There will be a resolution of this situation, and that's when you will get your signals, setups will shape up and trades will come your way. Until then, feel confident in your lack of confidence - it takes a real trader to say "I don't know." Good teacher teaches humility - and the market is a GREAT teacher. To quote A Taoist Trader:
"The vulgar are clever, self-assured;
I alone, depressed.
Patient as the sea,
Adrift, seemingly aimless.
It’s much more common
for a really knowledgeable experienced trader to sound reluctant, to be
unsure of the future developments and admit it openly. Knowing how
uncertain the market is, he is not so quick to express full confidence; he
accepts that events may develop in unforeseen way, and such acceptance
makes him better prepared for an unexpected turn of events. A Taoist
Trader’s plans and prognosis are usually tentative, with provisions for
various conditions. They will include many “ifs” and “buts.” He would
rather plan for multiple scenarios than put his full confidence in a single
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