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Thread: Unpredictable Price Drop or just lack of Experience ?

  1. Default Unpredictable Price Drop or just lack of Experience ?

    Hello, I need your help

    I'm new in swing trading but I read a lot of materials before jumping in ! Got a few sucess first week (+3%), lost all during the second week (non-rational decision, stress haha). I'm now more careful with my trades, I'm doing 3% so far for the third week.

    I notice that there's some chart pattern that I failed "to predict" Like a sudden drop, but everything was indicating an uptrend. Or a big triangle consolidation from nowhere.

    Here's the first one AMD :

    The 14th everything was fine, big green candle that cross 8EMA - stoch was great. There was a hammer confirmed a few days before and it did touch the Bollinger wave. But on the 15 and 16th, there was a pullback from nowhere.

    ==> is it possible to predict it with some tools ? Or was it at least possible to be pretty sure that it was going to continue to raise after a few days ?

    Second : NLSN

    Same here, during the last four days, you can see price touched a strong resistance line (and the Bollinger before that) - Piercing Line and a good confirmation. Even more the price did cross the 8EMA...

    But there's a drop the two last days.

    Could I've predict that or it's just a part of probability that I have to deal with :/ ?

    I'm using : Stoichastic RSI Bollinger Waves 8EMA (sometimes 3EMA and 34EMA to see crossover) Japanese Candles

    I did check MACD or 20-50 SMA but I find the indicators I'm currently using less laggy and more accurate.

    Maybe there's others tools that I don't know yet that can indeed predict (in the sense of making me more alert) about these sudden drop. Because for now, it's just unavoidable...

  2. Default

    I suggest you try to free your mind from the idea that price 'ought' to do XYZ or 'should' do XYZ - especially if it's based on technical indicators. None of them predict what price will do in the future. They merely 'indicate' (hence the name) what price has done in the past and, based on this, what it may do in the future. Note emphasis. It's no stronger than that: the only certainty in trading is uncertainty.

  3. Default

    The latter. Now you're thinking along the 'right' lines. I say 'right' - but keep in mind there is no right or wrong: just generally agreed principles. But even these can be contentious, e.g. the use of a stop loss. I'd guess that 80%+ of T2W members would say stop losses are absolutely essential, but there are a vociferous minority who argue the exact opposite and claim that stop losses are the spawn of the devil. You have to work out what's right and wrong for you - don't accept the word of others - including me.

  4. Default

    The golden rule in any analysis IMO is about context. The obvious question to ask is where demand and supply sits in the overall picture. The first box I have highlighted represents selling pressure aka as supply. The second box represents buying aka as demand. It is obvious just by the price bars that supply exceeds demand simply by how quickly prices are going in one direction. Typically when we see a bearish sell off as in box one, we note how prices recover in the subsequent rally to determine how we position for the next move. Corrective rally typically recovers in an a-b-c manner to 62 % - 76 % area where it is considered a sell zone to trade the next leg down. There is no certainty in trading - just probabilities. The probability factor is based on the nature of price behaviour when it reaches a trade location when risk reward is optimal. However if the price rally is not corrective in nature but impulsive then the trade strategy changes.

  5. Default

    As a trader you cannot predict or control price and no amount of indicators will tell you anything about what price will do next.

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