One fault that many traders possess is the fact that they rely far too heavily on technical indicators to make their trading decisions. This can be an easy mistake to make, especially because you can still make consistent money the whole time you are doing this. If you look at your profit number, it could be easy to miss the fact that you were making a mistake at all. To put it another way, you can rely on technical indicators your whole trading career and be profitable. However, if you do this, you are not being as profitable as you could be, and this is why it’s a mistake to do so.
Let’s illustrate why technical indicators are not enough through an example. The Walt Disney Company (DIS) dropped 3 percent in price on a limited trading day on the Friday after Thanksgiving. Continue reading