Once Charles Darwin wrote something like this:
“It is not the strongest or the most intelligent who will survive, but those who can best manage change”
And you know something, I believe the same is true for traders:
“Traders that can adapt faster to the market changes (condition) are the ones that get consistent and positive results”
Look, from my point of view, trading is about adapting your strategy to the market condition.
It’s about trying to understand what the market is doing and what it is likely to do.
Once you have that information, you’ll feel confident about your trading plan, because you know what the market is likely to do.
That’s one of the reasons I believe robots and automatic trading systems are NOT the way to go.
You see, when you use an automatic system you trade in the exact same way, every single day, but the market is different from day to day.
It seems to me that, traders using robots or automatic systems want the market to adapt to their trading system… and that will never happen fellow traders… NEVER!
It’s the other way around, you need to adapt your trading system or strategy to the current market conditions.
And that my friends, comes with experience… Here is a good example.
Let me show you this chart:
In this NZDUSD Daily chart, everything is clear:
- clear swings
- clear S&R levels
But then something happens, the NZDUSD breaks through the support level and you might be tempted to draw an additional level and leave everything else as it is…
It would look something like this:
But that’s not the way to go.
You are using support and resistance levels because the market is actually taking those levels in consideration. If for any reason the market does not take them in consideration, why should you?
So the correct analysis would look something like this:
Once you adapt and get rid of that level, you see a clearer view of what the market is doing and what it is likely to do.
This way you can take better trading decisions.
Do you think adapting to the market conditions is important?
How do you adapt to the market conditions?
Whats your take about robots and automated systems?
Please share your thoughts.