Most of us find it difficult to analyze a large amount of market data and make rapid trading judgments.
There’s Way Too Much Price Noise
Imagine having to investigate the findings of an economic report, as well as the underlying information, analysts’ interpretations, and market reactions… all in order to make a swift trade choice in a matter of minutes or seconds based on a slew of additional data such as price patterns, inflection points, and technical indicators!
If reading the preceding paragraph made you feel out of breath, you should know that your brain goes into overdrive when it has too much information to absorb.
Dealing with that type of information overload and pressure on a daily basis can lead to “analysis paralysis,” which can make decision-making difficult.
To put it another way, too much information might be overwhelming for certain traders, preventing them from making any trading decisions. It’s like having too many tabs open on your browser, which causes it to crash!
When you’re in this circumstance, take a step back and tell yourself to concentrate just on the most important details.
Of course, deciding which bits of data are critical is easier said than done, and honing this ability takes considerable market experience.
Filtering data points and reliable news sources from opinion blogs or social media comments is an excellent method to keep things simple.
This isn’t to say that the latter content isn’t trustworthy; rather, you should make it a habit to form your own opinions based on the facts rather than being swayed by others’ opinions from the start.
Also keep in mind that most articles may have clickbait titles in order to attract more readers, rather than to convey unbiased headlines.
While there’s nothing wrong with clicking on links that grab your attention right away, it’s important to consider how they affect your perception and how they might lead to emotional trading. Instead of reacting only to the headlines, read the rest of the article to get a better understanding of what’s going on.
