And here we are again, sited in front of our monitors with a handful of frequently asked questions. I remember my first times on trading. It was a sort of battle between a part of me that could easily find the path and the other part which strongly believed that always knows a shortcut. Related to what I has just said, there is a fantastic story that represents it perfectly…

An old Cherokee told his grandson:
“My son, there is a battle between two wolves inside us all. One is evil. It is anger, jealousy, greed, and resentment, inferiority, lies and ego. The other is good. It is joy, peace, love, hope, humility, kindness, empathy, and truth.”
The boy thought about it, and asked, “Grandfather, which wolf wins?”
The old man quietly replied, “The one you feed.”

In trading the part you decide to feed makes the difference between a successful, joyful, wealthy trading life and a bitter flavor every
time you listen or remember about trading. However, there exists a way to keep us on track, our GPS that clearly trace the path from where we are to where we want to be, and its name is LOGIC. In short, learning the basics of technical analysis and some trading strategies could take a few weeks; nevertheless learning to use logic in your favor could take you a few days or decades.
Here I share some tips based on logic that help me avoid feeding the wrong wolf. Some of these tips may seem quite obvious, but they take a lot of time to achieve.

  1. Before taking a position always ask yourself whether there are reasons for entering in the opposite direction. If the answer is “no” then you are certainly in the right path.
  2. Follow the path of least resistance if your intention is to be on the right side.
  3. Avoid the unfunded arguments, like “this one is delayed, as soon as I enter it will come into a rally”. When the trend gets strength the “good ones” always make us look like as if we are entering late on them; however logic says that this trend will frequently keep on going on the same direction.
  4. Don’t leave a good position unless you have strong arguments to determinate that it is time to enter in the opposite direction.
  5. Always remember the following core ideas such as “follow the trend”, “let flow profits”, and “rapidly cut your losses”.
  6. If you take a position expecting certain conditions there is no reason to remain inside if the arguments start to fade.
  7. Don’t try to take the sun when is raining, do not trade the exceptional movement just trade the regular ones.
  8. Do your analysis based on logic and commonsense.
  9. And always remember that is not the market it's you.
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