My time focusing on the details of trading is bearing good fruit. It’s interesting in that as one moves to closer precision and finer detail, the amount of time needed for analysis also increases. It’s the difference between picking a “general” entry point where you aren’t sure in the immediate short term where prices are headed, but believe the overall move to go in a specific direction over time, versus a narrow range entry that is expected to move in the expected direction immediately.
When you’re looking for precise entries, you have to be dead-on in your analysis- no room for educated guesses or fudging here. Any mistake results in a missed or failed opportunity. Making painstaking small adjustments to correct for errors is where the bulk of time is consumed. When you fine tune measure the market- you realize just how nuanced it is and care must be made to pay attentional to all the smallest details of movement. It’s like working in a lab and analyzing all the data- my trading lab! =)
Why take the extra time to achieve this level of precision? Because the more precise an entry, the smaller one’s stop loss trigger can be- meaning the less one has to risk if wrong. Big stops are used to allow the market to move around more into the loss column due to not knowing when the market will make its anticipated move. Big stops means bigger risk and subsequent bigger losses if wrong. Smaller stops mean greater accuracy and lower risk. Of course smaller stops need greater precision entries to ensure one doesn’t get whipped out of their trade.
If all goes as planned, I’ll have some big trading updates on the way.