As traders, we are often biased by our positions and how we want a certain outcome. Our desire for the perfect result where we are always making money and never losing is an unrealistic proposition.
Turning a blind eye to what is truly happening has turned fortunes into ruins many times over. Since we don’t know the future and our fate is in the hands of the trading gods (mostly) we tend to suffer from tunnel vision, only seeing what makes us feel good rather than the entire big picture. But this is not rational for a trader, even if we’re focused.
I look at charts and technicals to keep my biases in check. A picture will tell a thousand words, and since we’re looking at history of prices in charts there is no dispute. I always start and end with the charts as the traditional patterns I have learned to trust rarely if ever fail me. I’m always open to learning new trends and patterns and will take advantage when I prove them to be reliable.
The chart and technical patterns arm a trader with the best chance of creating a high probability trade, or conversely keeps him/her out of a potentially disastrous event. While far from perfect, the time-tested patterns can eliminate the emotions we all seem to display when our capital is on the line the outcome is uncertain.
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Bob Lang has been managing private options trading accounts for clients since 2004 and providing subscribers with guidance on trading options for income at Explosive Options since 2011.
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