Seeing What We Want to See and Why It is Dangerous......
In most cases where I speak with junior traders or even some people that should know a lot better and don't they have a tendency to see what they want to see in the markets. You know a Candle pin means a sure sell off or a double bounce signals a reversal of price action. In short there are many reasons why price action does what it does but the main reason is traders taking positions on the open market. Based on the data feed that most traders get from their meta trader 4 platform (which by the way is simply market makers making the market) and not the real bank rates there in exists the real problem traders encounter.
Let me ask you this, do you think that the market makers put these sorts of signals on the markets for you to see so that they can act against it?
If you said, "yes", you would be right.
It only makes sense if you think about it. There has to be a reason why traders would take a position in the market. Or at least you should have one.
The brokers of these bucket shops (which is the majority) and the market makers know this. They know the reasons why you trade. As you study the market price action they in turn study your trading styles. They have long since learned what ways to move the markets to get traders to take the positions they do.
You see it all comes down to seeing what you want to see. Not necessarily what is there but what you want to see. It is a trick the mind plays on you. It is the same reason why you impulse buy or gamble. You see potential for a reward right. We do things to get rewarded, not punished. Most people seek pleasure and do their very best to avoid pain.
In their cunning the market makers seek to give you a few wins coupled to larger losses to keep you hooked and thinking that you will make lots of money eventually. It is possible but what it comes down to is taking a longer term approach like we do with the signal where you won't be shaken out by seeing what you want to see.
I know it runs in the face of most of what you have ever been taught about trading but that is precisely the point. Knowing when to enter a position and why is far more important than trading to be rewarded.
As you note I have not called a signal yet this week. There is a reason for that too.
Stay tuned and I will make the call but it has to be what is really there and not what I want to see.
I hope that helps:)
Let me ask you this, do you think that the market makers put these sorts of signals on the markets for you to see so that they can act against it?
If you said, "yes", you would be right.
It only makes sense if you think about it. There has to be a reason why traders would take a position in the market. Or at least you should have one.
The brokers of these bucket shops (which is the majority) and the market makers know this. They know the reasons why you trade. As you study the market price action they in turn study your trading styles. They have long since learned what ways to move the markets to get traders to take the positions they do.
You see it all comes down to seeing what you want to see. Not necessarily what is there but what you want to see. It is a trick the mind plays on you. It is the same reason why you impulse buy or gamble. You see potential for a reward right. We do things to get rewarded, not punished. Most people seek pleasure and do their very best to avoid pain.
In their cunning the market makers seek to give you a few wins coupled to larger losses to keep you hooked and thinking that you will make lots of money eventually. It is possible but what it comes down to is taking a longer term approach like we do with the signal where you won't be shaken out by seeing what you want to see.
I know it runs in the face of most of what you have ever been taught about trading but that is precisely the point. Knowing when to enter a position and why is far more important than trading to be rewarded.
As you note I have not called a signal yet this week. There is a reason for that too.
Stay tuned and I will make the call but it has to be what is really there and not what I want to see.
I hope that helps:)
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