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It's market psychology that influences your decision making..

In 2019 the markets advanced forward quickly and most dips were bought up aggressively. What worked in the past should continue to work until we see a fundamental shift in market sentiment. Whether its macro numbers technical breaches or just profit taking it hasn't really mattered the market remains in an uptrend. It all seems elementary, just buy the dip and sell the peaks. Unfortunately most of us can't seem to time things out perfectly and end up buying peaks and selling into the downdraft. Market psychology plays tricks on us and we get caught up in the moment and do the opposite of what we know is correct. It's very easy to sell when it appears the sky is falling and buy when the market trends higher.


The key to successfully follow through on your trading plan is to not let outside factors influence the mechanics of your trading. These influences can come from market commentators, friends or even yourself. It's important you don't talk yourself out of trades based on what you hear or even feel about the market. So how do you do the opposite of what you naturally think is correct? Create a trading plan and stick to the rules you implemented in it. If you know you want to be in the market at lower levels then buy when you see a dip and don't talk yourself out of it. Just ensure you have an exit plan if things end up going the opposite way. It's important to leave yourself enough room to be wrong in the short term, but not so much so that it violates your risk tolerance for the trade.


A simple rule I always keep in the back of my head is to be in control of my own destiny. If I'm going to donate money to the market it should be on my own terms and because I made a mistake in my analysis, not due to being psyched out by outside influences. Just remember before you take action to refer back to your trade plan and see if the trade still fits the parameters you set forth.

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