is one of the most important things in trading. With all the people talking about the 1040 level in the es, the 200 dma and other technical indicators, everybody is debating macro issues again. Some observers think, we are going to the next phase of the bear market and we will take out the low of 666 on the s&p, others make predictions of how long this correction in a bull market will last and when the next move up will finally come.
Sometimes its fun to listen to all those hedge fund managers, CEOs and commentators of the financial media.And it is easy to make yourself believe that you know something that others don’t know,just because you spend so much time watching the markets.Therefore you sometimes feel that you can trade based on that “knowledge”. But most of the time everything turns out completely different than most people think. It is like they say: the market is designed to fool most of the people,most of the time.
But it is always important to know the relevant information for yourself and what you need to know about the market to make your decisions. As a trader those are totally different things than those you have to know as an investor. And an investor has other priorities as someone in the media. So you have to know where your place is, to make the right decisions and to be able to focus on whats important for you.
Because I define myself as a day trader and also as a swing trader in the right environment, I have to take a look at the trends in the markets, defined by technical indicators on multiple timeframes. Everything else is basically irrelevant for my trading. Political decisions can influence the stock market,but I don’t trade because of any political decision, but because of the effect it has on the market and the technical indicators that I follow.