Mark douglas talks about how new traders consistently manage to buy and sell at the worst time right before big moves But i dont remember him explaining why or maybe i didnt understand the way he explained it looking over my trades i noticed myself doing exactly that also I would hold and hold and hold through consolidation and then think well sht this is not doing anything so i sell And it literally starts up trend an hour after i sold Or a day after i sold... Or i see what looks like a good potential uptrend i buy and it reverses to the downside right away Seems like there are triggers built into charts that "seem legit" for inexperienced traders that push them to make certain moves 1 this consolidation seems like it will never end im tired of this so i sell... it spikes Examples: dogecoin before spike last year long ass consolidation then sudden uptrend. I sold after waiting for months for it to do something 2 This downtrend is going on forever i dont know if it will ever end, i sell and it reverses because the trend was so painful to watch it was like the last nail in the coffin that people just give up and sell Examples: nvcn brqs sos they all have that slow painfull torture downtrend im looking for general psychology not the above specific stocks Are there triggers built into charts that new investors fall for? What makes new investors buy and sell at the wrong times. Obviously the see something on the chart that triggers their feels to buy and sell
This has little to do with psychology and is entirely due to having no plan. When plan is backed up by solid stats you don't overthink it, just keep executing without worrying too much if any trade is a win or a loss. Doing wrong things at the wrong time is simply a byproduct of not having sufficient research, plan and/or confidence in them.
new traders donr have enough information to even overthink their trades. they look at chart "seems like a good time to buy/sell" what triggers them is something they see on a chart.
Perhaps they did not carefully Read and Study Mark Douglas' "Trading in The Zone". Brilliant Book and covers all your Questions.
Without looking in specific trades, as ValeryN says, your mind is good in tricking you. We remember our missed chances and forget the times we were ‘lucky’ Another nice experiment is drawing a random line on a chart. See how many times price ‘reacts’ to it. Really, try it.
Once you let emotions rule you, you are toast. A friend of mine who I share my trades with, she panicked and sold two profitable trades (put options) and ended up with teeny tiny profits in the process. The stocks were trending down and she flat out panicked because the stockmarket was going down? Trend on both stocks was down and she had put options, both trades going her way. She just panicked. I am still sitting on those two trades. Not going anywhere. Too bad she wasted it.
I would argue it has everything to do with psychology and that is why you need a plan to help you stay discipline and like you said not to 'overthink it' I completely agree there.... I also believe it has less to do with being a newbie and more so being human because as humans we tend to do things ass backwards!
As you are the trader doing that you are in the best position to answer those questions. My questions would be why are you holding a stock that has been consolidating for a long time? Why once you have sold a stock and it shows some strength don't you re-enter the trade? Why are you holding a stock that is in a down trend? My guess would be you don't like the pain of taking a loss and FOMO. Not unusual for someone starting out but something you as a trader have to overcome.
What's the difference of a twenty years of experience surgeon and first year med student. Which one would you want to do heart transplant ? Trading same way.