Absolutely. And we should always view specific detail in the overall context of what our market is doing. For example, an engulfing candle has a widely-recognised consequence. But do markets always respond accordingly - or are these sometimes like “Friday 13th”. Bad things apparently always happen on Fri 13th. But in reality, because we anticipate them, whatever bad occurs on that day only serves to strengthen the myth. But are there really any more bad things than on any other day…
Does the market always respond to, say, an engulfing candle in the same way? How often does it not do so? On what timeframes are they most reliable? What kind of market movement has preceded the candle? And so on…
We must remember that “the market” is not an independent entity with its own life. We often hear about what the banks are doing, and the institutions, and the speculators, and the investors, and the retail, and the brokers, etc. But “the market” is just the sum total of all these participants’ actions and the subsequent reaction to the overall majority view - and this majority view is real-time and changing constantly.
But knowing how your market moves and why is only half of the total story…
Perhaps even more important is to know how you, the trader, actually function within the market. It is worth seriously journalling every single entry and exit with an analysis of why you did it? why it was right, or why it was wrong.
For example, did I read the market wrong? did I miss a clue? did I panic and exit too soon? did I run my losses too far? did I anticipate a move instead of waiting for confirmation? did I ignore my exposure limit?
Every trade offers insights about what I can learn about my market and what I can learn about myself and my trading approach.
Without that kind of knowledge and development we will not evolve and we will just keep repeating the same mistakes and the same responses to the same market scenarios whenever they repeat in the future.
Analysing oneself is as essential as analysing the market.
Your trades are like sheep than can run in all directions with no logic or purpose, and other trades just follow blindly in the same fashion. Only you, the trader, are the sheepdog that can control and guide your trades into the pen.