Common price action trading mistakes that cost me lakhs of rupees:
A thread ๐งต
1. Front running the market based on my analysis:
Any analysis we do should be proved by market as correct before we jump into a trade.
How?
(1/n)
Example:
Mr. X marked 1500 as a strong support in HDFC Bank. Next day, stock opened at 1510, came down and hit 1500.
ABC went long in the stock. A few minutes later, stop got triggered. What went wrong here?
(2/n)
1500 is support for HDFC bank as per Mr. X but he did not wait to check if market validated his opinion.
At supports and resistances marked by a trader (you), wait for market to show the stock is actually taking support/resistance at those levels.
(3/n)
For your analysis to be correct, market buying>selling at support, market selling>buying at resistance.
Essentially, on a lower TF, check for bullish price action at support, bearish price action at resistance before you enter the trade.
(4/n)
Remember that no support is too low to be broken and no resistance is too high to be broken.
(5/n)