Preparing Your Mind for Technical Analysis
In this part . . .
Trading has two components: The security’s price and you. Start getting used to thinking about risk, because your own personal level of risk appetite or risk aversion affects how you analyze price movements. In this part, I show that none of the techniques for identifying and measuring market sentiment is 100 percent accurate, and so your choice of which technical methods to use is heavily colored by your perception of risk. Two people can agree entirely on what a technical indicator means and still make different — and equally valid — trading decisions.