Today we will discuss yet another critical tool used by traders that have had a profound impact on me.
Read time: about 2 min.
A quick recap: The charts analogy allows us to use the correct perspective with our situations. The Stop Loss method is essential to evaluate the choices we make in our lives. The Support & Resistance example compels us to validate or challenge our beliefs and chose the right side that aligns with our values.
Similar to Windsocks, which is used as an essential guide for wind direction and speed, Technical indicators are used by most traders to get a sense of market direction and speed.
Two types of indicators are very popular among traders — Fundamental and Technical indicators. I do not use Fundamental, so I will skip it. Technical indicators, as the name suggests, uses advanced techniques on current and historical price movements for predicting market direction and speed. Most Technical indicators are lagging in nature, which, based on past price behaviour, indicates the probable future price direction. For instance, based on certain volume pressure, exhaustion, oscillation, order flow, relative strength, the indicator draws a probability of the future price direction.
Fortunes are made and lost based on the direction prompted by these technical indicators.
That’s for the traders. Now, coming to our exciting reality, we get to use similar tools in our lives to validate or gauge where we are headed. Unlike the very complex methodology denoted by the Technical indicators for trading, the indicators available to us are quite straightforward.
How do we know where we are headed and whether we are on the right track? Where you are relative to where you wish to be can be easily understood by observing the results of the various aspects of your lives. Like the windsocks, open-minded and self-reflective questions about our current state would reveal our probable future.
- Are we happy?
- How’s our health? Are we Red Bull buzzing or tired and exhausted?
- How is our relationships with ourselves and others?
- Are we happy with our occupation?
- Are we growing intellectually?
- Are we connecting socially?
- Are we managing our personal finance and career for tomorrow?
- Are we taking care of our children’s values?
- Are we taking care of our planet?
The answers to these and many others will be different for different people. However, the answers will give the same outcome – an indication of where we are or where we are headed. These indicators could either be your soul searching lights of a Lighthouse or an amber or red alert of emergency. Regardless, what you do with that information will decide your future.
Thank you for sharing some of your precious time with me each week.
Until next week.