The Early Days
“To make money in the markets you have to think independently and be humble.” – Ray Dalio
I remember my first introduction to trading was during COVID and like many others I had decided I wanted to make some extra money while I was in my junior year of high school. Shortly after I opened my first brokerage account, I purchased my very first stock. Now at the time the company was doing very well but my excitement quickly disappeared, and I faced the reality that I had absolutely no clue what I was doing. So, I did some digging into one of the of the two methods for analyzing a stock: Technical Analysis.
During that time, I began to immerse myself in the topic with YouTube University and a couple of books I had downloaded, however, when it came to actually using the information, I always stopped at the starting line. Why? I just don’t like to be bad at new things. To me trading was an intellectual art form that I was a beginner in and that was somehow a reflection in my value. But as I matured over the years I am now at the point where I am confronting this idea that though I am intelligent, it is okay for me not to understand something out the gate. So, I write this to you to share some of my early lessons on the topic and as a way to document my progress in facing this giant of mine.
What is Technical Analysis
Technical analysis simply put is a way for us to forecast future stock price based on past data and really is just a way for us to make an educated guess. Now if you’ve ever seen a stock chart you can also feel intimidated at first glance like I did. You feel like you’ve just sat in the driver’s seat of a plane with a lot of buttons, levers, and dials that have no visual indicator of what they do. However, like a pilot attends flight school, technical analysis is a discipline that can be learned over time with patience and dedication.
Some Initial Lessons I’ve Learned
- TECHNICAL ANALYSIS IS NOT A WAY TO PREDICT THE FUTURE. A common misconception when talking about the topic is believing that it is a crystal ball. It is very important to voice the difference between forecasting and predicting. Like a weatherman, they can talk about certain data points like wind speed and direction that can indicate that there is 75% chance of rain. With that information you can bring a coat and umbrella just in case it does. But if you go your whole day without seeing so much as a drop it doesn’t mean that the weatherman was uneducated, it just means that we fell within the other 25%. Predictions are baseless, forecasting is supported.
- PRICE IS KING. No matter how you much research you do and supporting evidence you gather, price will always tell you whether you were right or wrong. The funny part is even if you “are right”, “The market can stay irrational longer than you can stay solvent.” Robert Keynes. Sometimes you can have the right decision at the wrong time.
- UNDERSTANDING TREND AND PATTERNS ARE CRUCIAL TO YOUR SUCCESS. This is where putting the time to become educated comes in. If you truly desire to be successful in the markets like the greats do, you have to put in focused work in order for that to happen. Do not be deceived, God will not be mocked. Whatever a man sows, he will reap in return.” Galatians 6:7. This is a law that is built into the very fabric of the universe.
In Conclusion
If you want how to make money in the markets, learning the language is the first place to start. Stay tuned and follow our social media pages for more post as I continue my journey to beat the markets.
