Hey folks,
During the past few months, I have been studying about TA and price action trading. But I am so stuck and can not move on any further. I always have this question in my mind which I can't find a persuasive answer to it. If there is a pattern/ strategy/ edge to consistently beat the market using price action and charts then competition from other traders should make it disappear or at least make it difficult to beat the market after costs. (the edge should self-defeats).
In other words, beating the market using past price data seems too good to be true because if it is not the case then that would be very easy for everyone to do the same. It is very reasonable to believe that the massive competition should eventually make any advantage/ edge self-defeat and stop working. So, what am I missing here guys ?
Sorry for my average English. And thanks in advance
You said (If there is a pattern/ strategy/ edge to consistently beat the market using price action and charts then competition from other traders should make it disappear or at least make it difficult to beat the market after costs)
a)Patterns are always appearing, It takes time to recognize the ones that you can trust. It takes money management skills to keep you from losing too much on a given trade. I don't risk more than 100$ on a given trade. If the day trading margin is 1k and your account is 6K? How many tries do you think you have if you only risk 100$ per trade? "Lots" but you can also burn thru it quick if you don't have a solid plan and money management skills. Also how many losses do you need to make to realize you don't know what you are doing?
Best to experiment with Demo account first. There are tons to learn and know. But there is no beating the market, as Handle123 has said you will be trading against yourself, especially when real money is on the line. Markets will destabilize you when you are trading for real and they will find your weakness. Best to look at this as gambling, when you risk money you are just taking a bet on a transaction and hope your entry will give you a return. If your too hungry than you will lose more. You need a note pad on your desk and you need to write down your thoughts and observations than re-read your journal over the weekend. If it makes no sense than you will know why.
b) Strategies, are dime a dozen. Your best strategy is managing your risk using money management to limit your losses.
Stop overthinking, your not competing with anyone other than yourself. This is electronic trading your order is minuscule at the very least. This is not brain surgery but the risks can be big if you don't use stops.
Hope this helps a bit.
