Timing Solutions for Swing Traders: A Novel Approach to Successful Trading Using Technical Analysis and Financial Astrology

CHAPTER 1

Be Prepared

Trading stocks is 100 percent mental. Trading means the buying and selling of one or multiple stocks to take advantage of price fluctuations, rather than just holding on to the stocks indefinitely. Success as a trader is a difficult achievement; it has never been easy. Added to this, the 2008 financial crisis brought to the market a new age of volatility, as well as new thinking and new approaches in trading. If you do not know what you are doing, trading will now be even harder.

Markets consist of a multitude of investors from individuals to institutions, each with their own investment agenda. In aggregate, investors’ emotions of greed, fear, hope, and despair dictate market fluctuations and directional movements. Similarly, the psychological state of a trader may affect his trading results because his emotions influence his decision making. To outperform the market and to succeed in trading, a trader needs to take charge of his emotions. To start off, he requires a patient and confident mind. If a trader is confused about what he is doing, the probable win ratio is zero and he might as well give up trading. The mind is mischievous and it often is the primary cause of failures. The market is always creating noises and if a trader fails to control his inner noises, how can he listen to what the market is trying to tell him?

In Figure 1.1, the Hang Seng Index showed that the market was in an optimistic mood for about 55 months from April 2005 to its exuberant ...