Conviction

It's an all out sentiment brawl between Bulls and Bears right now. The market is moving fast and is whipsawing both parties in violent indecision.

It's times like these that you better have conviction in your overarching thesis or you will get chopped into pieces.

There are inherent limitations with technical analysis. Candlesticks are nothing but indicators of sentiment. They will show you the emotion of the moment, milestones in the neverending battle of supply and demand nothing more. If only every doji neatly marked a top or a bottom, we would all be rich. It is true that over time certain patterns will emerge but the truth is more often than not we see only what we are looking for. Confirmation Bias.

As humans we cannot predict the future. As traders we like to fool ourselves into thinking that we can.

Whatever method you use to manage risk, employ it. Charts can offer useful levels to trade against and manage risk but don't fool yourself into thinking there is any predictive power in them. As the old disclaimer says 'past results are not indicative of future performance.'

When the initial reason you got into a position has changed, fundamental or technical, be willing to adapt and get out.

I don't know what the market is going to do tommorrow. Nobody does.

My thesis is that after POMO ends, the market will sell off. If after October the fed ends QE and the market rallies, I will reasses my theory. This is my fundamental overarching thesis currently. You can pretend that you are some entity of cold rational logic, immaculately unbiased, but I wouldn't believe you. I think some level of bias can even be a good thing, call it conviction.

Chopfests like this, conviction is the only thing thats keeping you in the game.

Everyday the market is one big battleground between bulls and bears. Right now the fight is heated.

So how do you maintain conviction in your Bullish or Bearish bets while at the same time knowing the exact moment when your thesis is proven wrong allowing you to minimize drawdowns? That's the million dollar question.

What is better fundamental or technical analysis? Do either methods offer any real predictive power? Can you really ever predict the future with any certainty at all?

Speculation, the madness of men. If you want to go crazy, try trading stocks. The allure and desire of vast fortune, the fear of financial ruin. The market will make and break you, goodluck.