Market Scheming

Monday, July 5, 2010

Attempted logical arguments.

As mentioned in my in my first post, it would be great to find fallacies in my original logic by analyzing these posts at a later date.  This way if there is a common error in my reasoning why a certain trade should work, I can then adjust future trading plans to have a better probability of being correct or more precise.  Common mistakes could be: misinterpreting an indicator or strength of a particular indicator.  Another reoccurring mistake that can be refined would be the positioning of your stop-loss. A precise Stop-loss is required to limit losses when a trade goes the wrong way.


The reason i bring this up now is that if am alerted early to a fallacy in my logic for a trade I will have enough time to halt my trading plan or continue with adjusted entry and exit points.  So please please please rip my trading plans to shreds, I actively want criticism because it would yield important information before I execute a trade.
I thank you in advance.


I will not go into depth about specific technical indicators or chart patterns that i might use. There are a lot of information on the web about how and why these techniques word and in what contexts they are best used. If there is any questions about the usage of an indicator then i will elaborate more. I will not go into depth about the fundamentals versus technical analysis debate, since both sides have valid arrangements (Yet I find fundamentalites are more resistance to understanding why and how tech analysis has interesting insight).  My reasoning for trying to research both is that many people use either (or a mix) of these approach with success and failure.  So i would rather not be ignorant to a way approaching a trade.  What i have mentioned to some friends is that technical analysis is interesting because if many indicators confirm a trade it is like stacking the odds in your favor.  The same with fundamentals, if car sales are positive one month and turn negative for a few months i could reasonably assume that the chances of a downtrend beginning or continuing are now higher.

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