TRADING PARADOX WITH THE REALITY

Let's say you want to buy a car. And the price car dropped to the lowest price of the year. And the news came out that government will raise the car sales tax next month. Big possibilities you will buy the car as the price is already very cheap and next month the overall price will likely to go up as the tax applied. We do it at every other aspect in life. Buy wholesale groceries when it's in discount for monthly stock, searching the best bargain, and so on. This habit trick our mind to always buy on the low price.

Unfortunately trading can't be treated like that. Sometimes it work. Most of the time it won't. You're agresivelly buying and averaging down on the downtrend because the price is very very cheap already. You reluctantly buying the uptrend because the price is already high. Or worse, you short the uptrend because of the same reason. Also it's very uncomfortable to buy/sold everytime price move with your favor. You won't buy groceries more than 10 if every 10 items purchased, the price will going up, unless it's emergency. This habit is not your fault. We lived with this habit in this world every day. That's another reason why most traders failed in the beginning of the journey. They didn't realize this habit actually sabotaging their account. This mindset bombarding your mind almost every day since you learnt how to do the math. How many advertisement every day with a discount, clearing house, bargain, cashback, redeem, etc you see? More than 10 times in a day I guess.

So how to fight it? It's a matter of how much trust you have on your trading system. Do the unconvenient way, buy the overbought, sell the oversold if your system said so. The risk is greater for reversal, so it's your SL to do the job. Sometimes it won't work. But you'll be surpise how further more the price will move beyond your expectation. Do it until it planted in your subconscious mind.

Just another sharing thought from my idle mind. Hope this help :)

PS : one good article http://www.smbtraining.com/blog/could-you-reenter