What happens is a lot of people look at technical analysis and they put so much weight into it.
Before they get into a position, they are focus on where they will go, is this bullish? Is it bearish?
This is really what happens in these positions.
I think people are just too much into it and too focused on where do they get in and what direction is this not going to. We’ve been trained, we’ve been conditioned by the media, the social networks of these kinds of things.
You buy a stock low, you sell it high or you sell it high and you buy it low. I think that’s a huge huge problem.
The problem with that is when you’re trading options, especially if you’re doing it kind of the right way, let’s say you’re doing an iron condor butterfly.
Even if you’re doing it directionally, at the point and the time you get into a position or trade, technical analysis doesn’t really matter too much.
Even at the beginning you can look at it, but it shouldn’t affect your strategy to a huge degree because you’ll be doing consistent trades time and time again.
So when you’re look at a basic technical analysis ,you might look at it initially and it may set up your position a little more bullish, a little more bearish.
Once you start getting into position
Well do you really care that much if you had a little extra wick on the candle? A little more volume and a little less volume.
At that point it matters a lot less.
Maybe I’ll put two percent five percent of my effort, emphasis and viewpoint in the technical analysis. But the majority and focus is going to be on this position.
As this position moves a little to the right or left, I may need to do something.
So that ultimately will be my honed in focus.
That is the most important part because this is what’s making or losing me money.
The technical analysis isn’t making or losing me money, it may give me an indication of where things may go.
This is the most important part right here, my position.
What’s happening with it? What do I need to do with it? How do I tweak it?
Technical analysis can tell me is, are we going to continue moving in the uptrend/downtrend?
But that’s not 100% accurate.
What I do know is where I’m positioned and with that, I need to make a decision.
Once you’re in a trade and position, your focus and attention, at least, the majority of it should be on your trade-in position.
You need to manage your trade and your position accordingly.
- Whether you take your loss
- Whether you take your wins
- Whether you take some off the table
This is what you need to do.
It’s about managing the trade and the position It’s not so much about where the direction will go because that’s anybody’s guess.
