As a new investor, you’ve probably had people tell you over and over that the only rule you need to remember is to always “buy low and sell high.” This sounds simple enough, and assuming that you have a basic idea of how making a profit works, it’s pretty easy to grasp, even for the brand new trader. The only problem is that it can be hard to know if a price has sun low enough or soared high enough, as the market is moving up and down all the time. What may seem like a good time to buy might be only the halfway point of a stock’s journey to lower prices. If you’re going to trade at the right time, you’ve got to learn how to decode the market’s message through chart patterns.

One of the best things about chart patterns in today’s modern market is that you no longer have to worry about tracking or drawing them by hand. There was a time when humans were responsible for finding out the range of prices that a stock enjoyed the day before, and plotting them on a graph for visual analysis, but those days are over.

When you first start to investigate chart patterns, you might be a little overwhelmed, because there are literally hundreds of different patterns, gaps, and trends that you can look for at any given point in time. But like anything, it’s important to start with the basics. One of the first patterns that new investors work on identifying is the head and shoulders pattern. This is a reversal often observed while the market is in an uptrend. Although the pattern tends to form while price is increasing, it ultimately signals that a downturn is on the horizon.

Another one of the most basic chart patterns to learn to identify is the candlestick. This pattern is constructed in such a way that traders can begin to see a relationship between opening and closing prices. The body of the candlestick shape is traditionally solid or hollow, with thin lines, known as shadows, tails or wicks, developing from the top or bottom of the body. These lines show the range of prices traded during that specific period, and can be used to detect a discrepancy between the actual value of the stock, and the public’s perception of value as expressed through price. Look for explanations of charts online, and practice looking for them in past market activity.

Trading the Financial Markets can be a roller coaster ride. If you hit a bad patch and find it difficult to recover, then hang in there. But you need to learn to accept that bad trading results are part and parcel of trading and trading development. In can be tiring and once you are drained of your energy, very often, what is left is only a big portion of Negative Energy or what I call Negativity.

In trading and many things in life, Negativity is a dangerous thing to have. It is worse in trading because this is a lonely activity. Family and friends are normally sceptical about this career and, hence,traders lack the support from them.Here are a few examples of the issues that can be cause by Negativity:
Start of a Negative Belief Cycle. Eventually, in a worst case scenario, you might even stop your trading career.
Cause of more negative emotions which leads to negative trading results.
Cause of lack of desire and motivationto excel or recover With that, I hope to share with you some of the lessons that I have learnt in the past to over come negativity. Recalibrate your Emotions Instead of letting your negative emotions go viral (which is the start of the Negativity cycle), you need to (1) accept your emotions (negative AND positive emotions) and be fully aware of what you are going through. Remember that we are supposed to be emotionless? Since that’s often a difficult task, the next level down is to be fully aware of it and to take note of the actions that are churned out of these emotions.

Once, you acknowledge that emotions exist and you are aware of your reaction towards them, you need to (2) let go of them and recalibrate yourself.

For me, I like to read the article by Mark Douglas on the -5 Fundamental Truth about Trading- (see article). I know other traders who would shut down their computers and head to the gym. Meanwhile, others would find their own little way of doing it. For other methods, do read myarticleon “5 Simple Control Mechanisms” (see article).

The biggest problem with having strong emotions (be it over-confident or fear) is that it tricks you into making irrational decisions. Hence, the earlier you recalibrate your emotions, the better. Just do it In the book -Hedge Fund Masters- (see book) by Ari Kiev, he interviews many top traders and analyse them in various ways. One of the conclusions from his interview was this

-Your Own Thinking is the source of you Anxiety- This is absolutely inline with the phrase -Paralysis of Analysis-. Hence, the only other way to overcome this problem is to keep things simple and Just Do It.

For example, when you see a trade, the chances are you know if it meets your rules within 3 minutes of your analysis. However, some traders have a tendency to re-analyse the same trade for 5 times before making a decision.On the contrary, when you over analyse, negative thoughts and images start filtering your mind. In the end, you start becoming emotional and your decisions become irrational. Fine, this might be somewhat of an exaggeration, but I think you get the point.

Note: Do not confuse -Just Do It- with rushing over it. Trading is simple, if the set up meets the rules, take the trade. Done. Find your Mojo Mojo or self-confidence is crucial for your eliminating negativity. When traders are confident about what they are doing, they do not hesitate their actions nor do that worry about their results.

The key to finding your mojo is practice, practice and practice. If you keep practicing, you are indirectly building your positive belief cycle. They more you do it, (1) the more you belief in it, (2) the more effort you will put into it, (3) the bigger the actions will be, (4) the better the result and (5) the more it will reinforce your initial belief.

And that is the how you can continue to build positivity and eliminate negativity. Conclusion A trader once told me that making money from trading is not a question any more. The real question is “How much will I make and how can I be better?”

That is the kind of attitude that all traders should have – Positivity. To get there, the first thing you need to do is to eliminate any possible Negativity.

Thank you for reading and happy trading!!