“Technical analysis is a skill that improves with experience and study. Always be a student and keep learning.” –John Murphy

General populous has the access to the trading techniques & analytical knowledge as everything is widely available on the internet. Is this all the art and science to technical analysis?

The answer is no. One thing which decides your success in trading is its application skills which can’t be developed just by gaining knowledge through internet medium.

One can only develop these trading skills by maintaining certain rules and discipline in their trading approach. There are some secrets about technical analysis of trading which is not common knowledge. Let’s take a dive into the insights of these secrets.

1. Trading Approach

Many implications of the term trading approach have been running around in the market & everyone has their own tried and tested philosophy. Trading approach should be defined and precise in nature. The time to buy and sell has to be at the right otherwise it is most likely to backfire. With every stock and commodity it differs as everthing depends on the experience and forecast of the trends. Trading needs proper knowledge which is not just theory but the application of it too.

2. Money and Risk management

Managing money and risk is the one & only part which actually incorporates all the art and science to stock trading. Taking care of the risk and parking of funds should be the main focus while trading. A trader should never think of making money or wealth out of this. If he knows how to manage risks and diversify his portfolio by making right choices, he can be a next big thing and wealth is just going to be a regular perk.

3. Avoiding Indicators and Perception:

Train your mind to evaluate every possibility of any buy or sell. As a trader, you will stumble upon many such tips or we can say indicators which will influence your decision. Try to see through it and make sure of all the possibilities which can arise if you opt for that. Same goes with the perception of the fellow traders or a tip/information from any unknown source. Beaware of the traps and you will win half the battle right there.

4. Not to follow the herd mentality

For traders the decision to buy or sell is mostly influenced by their sources whether trusted or not. They get influenced by their peers and buy something which is not advisable or feasible for them. This is the problem with most of the traders now a days. You should do you own research, apply the insights from your own experiences so that you only stay accountable for your actions.

5. Golden rules:

• Trade with the trend which is running in the market.
• Cut losses short by carefully pooling your funds
• Let the surplus from the trader do the further trading
• Manage risk by applying your learning
• Come prepared with a trading plan
• Never over trade

Stock trading is as much as an art as science. Always make a point trust your knowledge over your gut feeling. Keep in mind these five points and follow a step by step process to make the process more defined and result oriented. Make sure that you don’t fall for that common traps which you encounter along your journey.

Cheers!