Welcome to another issue of Traderwave Weekly, a trading newsletter where I curate the most useful trading articles on the internet to share with you.
Hope you will enjoy all these fabulous reads and apply those knowledge along your journey to become a proficient and profitable trader!
When I hang around trading groups or forums, I often see traders posting charts and seeking validation from the trading community if he is correct with his interpretation of the chart.
He wanted to get affirmation if a certain group of candles that he observed represents the formation one of a commonly known candlestick pattern.
Sometimes, people reply to agree with him, sometimes people disagree. Either way, I think both the poster and the people who replied with their views are totally missing the point about candlesticks.
In this trading article about candlestick patterns, the author aims to explain that there is no point in trying to memorise candlestick patterns and go around hunting for them as though they are the holy grail of trading, and as if finding one such exact pattern means the trade is going to be 100% profitable.
Very often, candlestick patterns are just a way to help traders be more aware about the psychology of the market behind those patterns.
It is more important to understand the rationale behind than trying to find that perfect candlestick pattern. If you have been trying to hunt for candlestick patterns like they are the holy grail, stop right now and give this article a good read.
TRADING BEST PRACTICES
Many inexperienced traders are commonly attracted to FX or CFD trading because both types of trading instruments allow the potential to leverage their often small trading account.
A new trader believes that by using leverage on this relatively small trading account, he will be able to maximise his potential returns without needing to put so much money upfront.
That is a very naive thinking.
In reality, when a trader uses leverage with the aim to maximise his returns, he is often magnifying his potential losses at the same time.
For a trader who doesn’t yet have a proven trading strategy with proven edge, the use of leverage is absolutely a recipe for disaster.
In this article, the author studied 13million real trades from a FX broker and arrived at a conclusion that the increased use of leverage has a detrimental outcome on profitability.
So before you head out and take on another trade with leverage, read this article now to know what you are really getting into.
TRADING WORDS OF WISDOM
Jesse Livermore is one of the most recognised trader in the past 100 years.
The learnings that he has shared in his journal and books are often classic and timeless because they focuses mainly on how to interpret human nature.
Human nature has not changed over the past hundreds of years and as such, his teachings continue to be very relevant today for new traders or experienced traders.
Learning how to lose without getting emotional and learning how to sit tight is one of the few teachings he has.
To understand how to apply these learnings, dig in to this article and absorb as much as you can.
If you find these articles I’ve shared useful, do share them with your friends by clicking the sharing buttons!
Latest posts by Philip Teo (see all)
- How can I prevent myself from over-analyizing a trade setup - May 23, 2019
- The importance of exercising patience as a proficient trader - May 21, 2019
- How much capital base should I start trading with - May 16, 2019