Mantra Trader Continue

You are right its much easier just reading the charts than developing your own feel for what they mean by spending time in understanding why the market is moving the way it is. But then again "reading" the charts is not so accurate as many people interpret technicals differently just as many people interpret fundamentals differently. I think I have pointed out that you should not try to predict where the market is going to move on a certain news item. You should rather decide what the markets' reaction to the news item mean- THAT determines your trend. If the market reacts as "expected" to the news then we are still in the trend if the reaction differ from the news then we need to understand why and decide whether the trend is still strong enough and whether this is just a normal pullback in the larger picture.

Yes, it is a lot of work and probably not worth it if you trade small but I don't think the odds are any better for a small trader using purely technicals without giving attention to the reasons behind the moves. Remember you want to be (and have to be) a specialist not a GP if you want to taste success consistently. I haven't met any pure technical traders ever. I think I have mentioned in a previous post that the traders take everything in consideration and then they might look at the technicals and "time" their entry using anything from MA crosses to fib's to elliot waves to mooncycles...

The most successful traders I have met however rely more on gut-feel fundamentals and proper money management.