Chapter 4

The Art of Trading

In This Chapter

arrow Moving beyond emotion with indicators

arrow Conquering fear of noise

arrow Selecting indicators

arrow Examining skill vs. art

Indicators are a shorthand way to identify and measure market sentiment. They give you a platform for making rational trading decisions, bypassing greed, fear, and the other emotions that accompany trading.

In this chapter, I discuss using indicators to help you trade systematically. Technical traders believe that systematic trading has a sporting chance of making significant profits. But indicators don't always work, and I explain why in this chapter. To overcome the unreliability of indicators, a money management plan is necessary, which I cover in Chapter 5.

remember.eps Trading is about money, and money arouses emotion. To speak of trading as involving only greed and fear, though, as most commentators do, is to shortchange the range of emotion in trading. Trading is also about personal success and failure. Traders feel remorse, shame, and ...

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