Even if you’re able to draw a very clear… Most of the time, if you’re able to draw a clear trend line, for example, and the price cross that trend line, you can’t be absolutely sure that the trend has changed anyway, okay. It doesn’t means that your trend line is very clear, or means that you’re 100% sure the trend has changed. No. That’s the real life, the reality about trading, is that you are never 100% sure.
So in trading is when you draw trend lines, when you draw support ressistance level, it’s just a means to help you gauge the likelihood, the probability, that it has turned, okay. And it doesn’t means that if you’re across the trend line means that, okay, you just whack all your equity on it. It’s not the case. You just have to make a small bet and see whether it turns out to be what you anticipate or not. If it turns out to be correct, the trend has changed, and you’re going to trade based on the change of the trend, then good. Then you should try to hold onto the trade to maximize your returns. If it didn’t work out, then you have to cut your loss. So basically that’s about it.
Trading is really about putting in a small amount of money to test your hypothesis of whether, in this case, has the trend change or not. And if the trend has changed then you try to maximize your return. If it doesn’t change, then you just cut your loss.
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