Market behaviour evokes an impulse within us.
Markets are such.
…at a spot…
…which has History with you.
They manage to find the spot.
And then they burn matches at it,…
…towards causing max-pain.
It can be a support level.
A resistance level.
What have you.
Use your imagination.
Whichever point holds value for you is open for needling.
Meaning, please take it for granted that this point will probably be pricked again and again.
…want you to act.
Your action, if you succumb to the impulse, will then probably benefit these ensembles.
You enter an underlying.
An ensemble takes it up 20% after your entry, on huge volume.
Price then falls for twelve sessions, on low volume, such that more than 50% of your notional profit evaporates.
What just happened?
You’re feeling that impulse to preserve that other 50% of your profit, right?
It could be the right decision.
Depends on your outlook.
Ensemble probably wishes to purchase another tranche, and is driving the price low enough to then act upon this relatively lower price.
How will you feel, if you exit now, and then price shoots another 25%, immediately after your exit?
Hmmm, that’s another way of looking at it.
Nobody knows before-hand.
What is in your hand, though, is the ability to gauge your impulse, and to synchronise it with your objectives upon initial entry.
When, then, one fine day, the impulse to act is so strong that no amount of rationalising can hold you back,…
…that’s the time when you…
…and it’s the right decision for you, irrespective of market outcome.
Such an “uncontrollable” impulse to act, even after study and attenuation, is better implemented rather than swallowed (leading to future indigestion).