Every trader and investor has her/his own framework of opinions that pilot the triggers. It is a mix of experience, knowledge and emotions. As your decisions are worth a gain, you have an euphorical sensation that you are mastering the forces that drive the market, but on the other side if your decisions take you on the losing side, you are bound toward depressions and your trading decisions gets worser and worser.
Every trader or investor has passed through these two extremes of the maniac-depressive syndrome and it is crucially importante to learn to manage its effects.
First, never blame someone else for your faults. Try to recognize your errors and learn to manage your money with realistic expectations. We need to study, not just install a charting software. But there is always a weak point in the process and it is our opinions. Opinions are strictly tied with sentiments and none of us is able to separate the actual objective facts from our perception of them, and this is inevitable.
As traders or investors, we need tools that help us stay away from emotions and from opinions. It may seem strange, but the less opinions you have, the better trading decisions you take. I have learned it developing the artificial intelligence model that powers the forecasts: you do not need to have opinions to make good trading decisions – more, it’s better you do not have opinions at all. No opinions, no stress. No stress, better trading decisions.
Technical analysis is based on opinions, Elliott’s wave theory is based on opinions, Gann’s theory is based on opinions, even fundamental analysis is based on opinions: all these instruments takes your emotions out of control, sooner or later.
Technical analysis, in its various forms, can be very useful: it may provide you with valuable information and can trigger signals in quite an objective way, but only if you use it inside a wider framework that provides you with a deeper reading of the market. Otherwise, it just will take your emotional side out of control.
Having a tool that shows how the market will act in near future is a powerful opinion deleter. No tool is perfect, of course, but if you trade with an unbiased vision of the future, your decisions are free from emotions and your rational expectation are stress free. This is the real and objective power that rises from artificial intelligence applied to trading or investing.