Bobby's Homework Assignment
2.18.23 It appears that coffee is going to trade higher. There is a particular ABCD pattern that suggests this. The critical pivot that allowed me to draw that pattern could have given me that clue. however, just after that clue appeared,, the market went a lot higher... not quite reaching the bearish gap lower, And then it moved all the way back to just about the gap that led to the substantial move Higher. In other words break out buyers move it a lot higher, And then the market Took out Most of those fires.... you would call it A wash and rinse.... and it might very well have you think that the Market's too bearish to move higher because the Lower Was so impressive...Many of the breakout buyers Exited the market and the thought that the market was going to go a lot higher it's either forgotten... or many Traders just don't want the risk to go along.... even though the tool that showed you it was likely to go higher has not been harmed in any way whatsoever because the correction lower actually takes you to a level that doesn't harm the reversal pattern and it fails to break below a support area or a 382. There is a Psychology for most people that they are more stressed Losing something that they feel was theirs ie. the market moves up Thousands of dollars for an unrealized profit, but then moves all the way back to break even... and they Are more traumatized by this then they are if they miss a trade of thousands of dollars.... even if both trade decisions lead to zero loss. There was a signal... in ABCD pattern Is that the market was going to trade considerably higher, But the market Attracted breakout fires first, And then it hurt those bars when the market came back to support... Making it very difficult for many traders To think about Going long after such a steep move higher and a steep correction lower. The Dynamics of this Are much greater than my description, but it's important to factor in human behavior and the things we naturally do that can actually be non-productive to our abilities to trade. once you get in trouble in a trade, it can throw you off and it can change your judgment about the market in non-productive ways.
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