I have a quote: "The stock market is not only about technical analysis". The stock market is always synonymous with charts, indicators, candlesticks (technical analysis), because recommending stock trading and predicting the JCI definitely requires technical analysis. If not technical analysis, then what analysis do you want to use?
But if you realize, the capital market is actually very much about market psychology. If you look at the stock price chart, then the stock price movement reflected in the trend chart is the result of market psychology.
Fine2, you just start learning from technical analysis, because if you want to trade, you must be able to do technical analysis. But technical analysis alone is not enough. Behind technical analysis there is such a thing as PSYCHOLOGY. I repeat once again: PSYCHOLOGY.
Many traders know technical analysis, without realizing how important the right trading psychology is, which they must apply to their trading system. Let's look at some facts about psychology in the stock market, which I summarized from the thoughts of many traders in the stock market.
1. Thought: Cut loss is not important, because I believe the stock price can reverse from the price I got. Fact: Cut loss is an important part of trading.
You need to know, not doing a cut loss limit, will cause your losses to swell, and eventually cause your stocks to fall. Read the post: The Cause of Stock is "Stuck", Traders Don't Want to Cut Loss.
2. Thought: Pursuing as much profit as possible from trading. Fact: The pursuit of profit alone will only make you lose your rationality, and forget the quality of analysis.
Trading is intended to generate profit in the form of money. But, it's wrong if you only pursue profit. Many traders are only profit oriented, thus ignoring the importance of technical analysis. If you are only looking for profit, then when you experience a loss, you will try to repay the loss in the next transaction which can actually eliminate the objectivity of your analysis. Read the post: Mistake: Wanting to Trade Just to Make Money.
3. Thought: The stock market is easy to predict. Fact: The stock market is unpredictable, you have to "go with the flow, not go against the market."
This thought makes you like guessing. When you believe that the stock market is predictable, you can be sure that you will trade in both bullish and bearish market conditions. In fact, you should understand when it's time to enter - exit the market - or wait and see. Especially, if you are a trader who only trades in a span of less than 1 week, then when market conditions are strong bearish, it is not the right time to enter the market.
4. Thoughts: Confused about not trading. Fact: trading is not necessary every day.
Trading should be based on analysis, i.e. using the right moment. Trading doesn't have to be done every day. If you have the principle of trading every day, your hands are itching because you want to buy stocks all the time, then you can be sure that many of your shares will 'stick' if market conditions are being hit by negative sentiment.
The opportunity to make a profit in the stock market is very wide, very open. It's just how you have to be able to put the right moment. The right moment doesn't mean you have to trade every day.
5. Thoughts: Always try to imitate the trading systems of well-known experts who have made a lot of profit. Fact: No matter how good a well-known expert system is, it's NOT SUITABLE FOR YOU FOR YOU, because everyone's characteristics are different.
In my opinion, my trading system (the analysis I use for stock price predictions) is very simple. You can see my analysis on the page: Daily Stock Recommendations. I'm sure that my trading system is nothing special, nothing special. I don't use a complicated trading system. It's not that I can't, but I feel more trained with a simpler system and I'm comfortable with a system that I have created myself. I'm not copying any expert's system.
No matter how good an expert system is, if it doesn't suit you, believe me you won't be able to reap the maximum profit. So, I suggest that you don't copy, unless the expert system really suits you. It's also a good idea if you adopt a trading system from an expert you respect. But the point is, you must be able to create a system that truly reflects your own character, not someone else's.
6. Thought: Buy as many portfolios as possible because the prices all go up. Fact: The more portfolios you have, the more difficult it is for you to monitor them and the smaller the returns you will get. The more you have too many portfolios, it means that your trading mentality is still not strong.
Actually, what is the purpose of my post? The goal is none other than to form the right trading mental attitude. Before moving on to technical analysis, the execution of buying and selling stocks, the first thing you should understand is: CORRECT TRADING PSYCHOLOGY. Not generating as much profit as possible in a short time.
The thoughts above I summarize from the thoughts of traders, and also my old thoughts during trading in the capital market. So, traders who have been trapped in wrong thoughts, should start fixing their trading mental attitude. And for beginners who just want to dive into the world of capital markets, you should read this post. If you have trading friends who still insist on saying cut loss is not important and so on, tell them to read this post.
