7 Common Mistakes in Technical Analysis (TA) Beginner

When using TA losses are inevitable for any trader. Even if the trader is an experienced
trader who makes few mistakes.
There are a few minor mistakes that almost every beginner makes at first. The best
traders are always open-minded, rational, and calm. They understand the game plan
and continuously analyze the market.
Introduction
Technical Analysis (TA) is one of the most commonly used methods for analyzing
financial markets. TA is applicable to any financial market, including equities, foreign
exchange, gold, and cryptocurrencies.
The basic impressions of technical analysis are quite easy to understand, but a difficult
art to master. It is natural to make a lot of mistakes when learning a new skill. This can
be a problem when it comes to trading and investing.
In this article, we will cover some common mistakes made in technical analysis.
1. Not cutting your losses
The elements of a good trading deal are:
(1) cut loss, (2) cut loss, (3) cut loss.
This is a simple step that requires an emphasis on the importance. Protecting capital is
always our top priority when it comes to trading and investing.
Starting to trade can be a daunting task. A solid approach to consider when starting is:
The first step is not to win, but not to lose. For this reason, it may be beneficial to start
with a smaller position size or even not risk any real money.
Setting a stop loss is a simple rationale. Transactions require void points. Here I admit
and accept that my trading ideas were wrong. If traders do not apply this mindset to
their trading, it will not work for them in the long run. A single bad trade can wreak
havoc on the user portfolio. The trader could end up holding on to a losing bag in the
hope that the market will recover.
2. Overtrading
Trading involves a lot of research and patience. Some trading strategies require users
to wait a long time to get a reliable signal to open a trade. Some traders trade less than
3 times a year and still get good returns.
Avoid entering a trade just for its own sake. It does not necessarily have to be a
business. In fact, depending on market conditions, it may be even more profitable to sit
back and wait for an opportunity. This way traders protect their capital and have it ready
to go when a good trading opportunity reappears.
A similar trading mistake is to overemphasize the lower timeframes. In general,
analyses performed over longer timeframes are more reliable than those performed
over shorter timeframes.
3. Revenge trading
It is common for traders to try to recoup large losses quickly. That is what is known as a
revenge deal if an individual wants to be a technical analyst, a day trader, or a swing
trader, It is important to avoid making emotional decisions.
Note the word "analysis" in technical analysis. Of course, this also includes an analytical
approach to the market, right? Avoid making emotional decisions and focus on
maintaining a logical and critical mindset.
4. Being too stubborn to change your mind
A successful trader should not be afraid to change their mind. Market conditions can
change rapidly. A good trader recognizes these changes and adapts to them. This
strategy works well in one market environment but may not work at all in another.
5. Ignoring extreme market conditions
TA prediction quality may be unreliable. These can be black swan events or other
extreme market conditions that are highly dependent on emotions and crowd
psychology. Markets are driven by supply and demand and can be extremely
unilaterally imbalanced.
Making blind decisions using technical tools can cost a trader to register a negative
outcome. This can occur during black swan events, where price movements are difficult
to interpret. These markets can go either way, and no analytical tool can stop them.
6. Forgetting that TA is a game of probabilities
Technical analysis does not deal with absolute values. It is about probability. This
means that whatever the technical approach underlying the strategy, there is never a
guarantee that the market will behave as expected.
7. Blindly following other traders
If a trader wants to stay good all the time, they have to find their strengths and build on
them. This is the advantage that distinguishes one trader from other traders.