“Birds of a feather, flock together”
The concept works with people - you are likely to become the average of your five best friends.
And it's true on Wall St., too.
When I started trading in 1999, I looked for and traded the best charts I could find, but I traded in a vacuum. I paid no attention to anything going on. I just wanted to trade the best looking charts.
Over time, after taking diligent notes on all my trades, I realized similarities between my winners and losers.
How does a trader get a quick pulse of the market? There are indices and sectors galore along with way too much information. This adds up to information overload and not enough time to intelligently decipher the information into a meaningful trading strategy.
Trading is hard. We all know that, and if we forget for a moment, the market is more than happy to remind us. Successful trading requires many skills and tasks.
Writing an article on the most important thing in trading is virtually impossible because everything matters. Even the smallest point can make the difference between winning and losing.
Have you ever wondered why most traders consistently lose money? There are several reasons why this happens, but it’s usually because traders follow some outside system they picked up somewhere, and followed it blindly.
It may work for a while, until it ultimately fails. Some traders can make five or six successful trades, and give all of their money back on the seventh trade.
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