by Gavin M.
I have the ES futures chart below. I have been one of the people out there that strongly supports having more inputs to your trading decisions rather than just blind trust in technical analysis alone. I am not saying TA is not important - but it should not be the be all, end all of all trading plans.
We always teach our students and clients that tech analysis is like a road map. It gives you an outline of where things could possibly go but as a trader, markets are far from being idealistic.
You can see in the 1-Hour chart below how tech analysis can fail you miserably and can cost you considerably if you blindly trusted your supports and resistance levels. Watch how relentless the sellers have been disregarding all significant levels until the selling momentum waned.
I am quite sure the technical chartists reading this post will be so disgusted with what I am saying here. But would I have placed blind faith at 2070 or 2053? I think not. Because I did take a calculated gamble at 2053 and I almost paid the price as the chart went down to 2033 overnight.
Trading is the acceptance of all the things you can and cannot control. But at the heart of every trade is risk management. You risk something - you may just make something. If you don't risk anything, you go home with nothing. But if you don't manage your risk, it will cost you everything.
Traders from Equity Sense will be writing on this blog on positions and other market-related things.