Why the same chart is perceived differently?


Business / Monday, September 20th, 2021

There have been many examples where investors have interpreted the same chart differently. Though they had similar experiences and used the same techniques to identify the trend, they came to a different conclusion. This is simply because emotions and experience can be a substantial fact in forex. In this article, we are going to explain why this phenomenon occurs and what is the results? Do traders need to think about how to come to a unified solution or they can progress in their career by having divided resolutions?

All these answers can be found in this post. Beginners should read this as they are easily confused. The brokers offer many tools but not all of them are helpful. This also contributes to a different perception of the same chart. Go through this post and you will discover how mindset, techniques, and the trading approach can affect the performance.

Beauty is in the heart of the beholder

First of all, not every person has the same goals in currency trading. The majority prefer to make fast cash without waiting for the trend. This results in interpreting even the simplest volatility as a big opportunity. This is why the community rushes to place an order whenever there is a trend formulating. The experts will wait until the market has shown opportunities are coming which they verify using their tools and knowledge.

A short-term investor, for example, will try to find potential even in the simple volatility. He will use a minute timeframe to convince his mind his entry is legit. He will interpret the formulation of news as a chance to make a profit. A long-term investor will use a longer timeframe to validate whether his predictions movement is right. This is how the same chart begins to get a diverse meaning based on the tools, knowledge, and goals.

Technical knowledge also plays part in this concept because a beginner will never know how to identify the minuscule matter. An expert will know whether he has any chance to make money. He is not after the trend but after the opportunity. This difference in knowledge and experience makes them perceive the same chart differently. For this reason, you often see different forms of market analysis from the top traders at Saxo Bank. But this doesn’t mean, the analysis are wrong. In fact, every diversified technical analysis might be right and may provide you decent profit taking opportunity.

But if you dig deep, you will realize that all of them are using a simple plan. They don’t believe in complex trading structure as it mess things up. So, when you develop your trading system, try to your best to simplify the overall process of trading. If you do so, you can reduce the stress.

Importance of simple data analysis

Professionals use a simple technique to determine whether a person is desperate to make money. They will advise using a longer timeframe to understand the movement but that trader will go for the shorter period. In this way, he can defend himself from the failures if his decisions do not bring rewards. When you look at the market through a minute timeframe, the volatility does seem appealing. It seems as if the market is going to explode with opportunities. Simply change back to a longer period and you will understand how slowly the price changes. You can also do this trick to identify whether your trading friend is desperate.

Does this affect the performance?

Yes, it does because not every person is going to make a profit. Only the successful investors are coming with a reward. You don’t need to have a unified solution but make sure the techniques are used properly. Don’t follow a broker and make decisions based on their suggestions. Try to get the same results as the experts because when you do, the performance is going to be more profitable.

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