Understanding timing in trading

Trading is an activity that more and more people are joining globally every day. Stocks, currencies, raw materials and, especially, cryptocurrencies, are responsible for this phenomenon, however, the fact that there are so many new people on this activity is what means that they do not have enough knowledge to operate properly.

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Having more and more new traders is good until ...

Until they lose all their money because they do not have enough knowledge to operate in the markets. Novice traders starts to operate in markets they do not understand, risking real capital. The problem here is that people who lose all of their capital in the markets, end up in most cases, withdrawing from trading.

There are many factors that new traders don't understand, but I'd say the two most important are:

1. They do not understand that they should only risk capital that they do not need for their personal expenses. And it should be noted that this factor is important even for experienced traders, but much more so for novice traders.

2. They do not understand the fact that they must know how to perform technical analysis and fundamental analysis of the assets before trading the markets. And not understanding this, these novice traders act blindly in the markets, or trade based on what other "expert traders" but such expert traders are not expert at all.

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And regarding technical analysis in trading, temporalities are one of the most misunderstood things at a general level

Technical analysis includes lots of factors that must be understood by the trader, such as patterns and indicators, to later develop an appropriate trading strategy as the case may be. But timing is definitely one of the most important elements that the trader must understand when performing technical analysis; And it's something that many traders (even knowing about patterns and indicators) sometimes don't understand properly.

A common mistake

I will give you a small example of a common error in trading: A trader visualizes a graph of a cryptocurrency (let's say Solana) in time of 1 hour, and after analyzing for a long time, he enters into purchase; and immediately the price falls, and said trader wonders why just when he entered to buy the market fell, especially when the projection he made of the price was positive, and he believed that it would rise from that moment.

Then, scared, said trader runs off to sell at a loss after a few minutes so as not to lose more money; but what did this trader do wrong?

He did wrong the projection of the price of the cryptocurrency that he traded? Technically not, because said trader has plenty of knowledge about chart indicators and patterns; So what went wrong there?

He simply did not understand that the analysis he carried out was on a 1 hour chart, which mean that he'd must to wait between 8 and 16 hours for his projection to have a chance to be verified, because said trader did not understand that everything in trading is projections, experiments, analysis and strategies; and that the projections must be given enough time to check or discard them.

This is the reason why trading is a science, because everything has its appropriate mechanisms and rationality.

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The trader must understand that:

1. If you analyze a 1-hour timeframe, the projection of the price you will obtain will be given within an approximate time of between 8 hours and 16 hours.
2. If you analyze a graph in timeframe of 2 hours, the projection of the price that you will obtain will be given within an approximate time of between 16 and 32 hours.
3. If you analyze a 4-hour chart, the projection of the price that you will obtain will be given within an approximate time of between 32 and 64 hours.
4. If you analyze a chart on a daily weekly basis, the projection of the price that you will obtain will be given within an approximate time of between 1 and 2 weeks.
5. If you analyze a graph on a weekly basis, the projection of the price that you will obtain will be given within an approximate time of between 2 months and 4 months.
6. If you analyze a graph in monthly timeframe, the projection of the price that you will obtain will be given within an approximate time of between 8 months and 16 months.

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Summarizing what was said

Understanding the timing is one of the most relevant elements in trading, and the trader who manages to understand this adequately knows how to properly wait the right time for the projections made through his chart analysis to be checked or discarded; which definitely helps you to be more successful both when analyzing and trading the markets.

Please, comment your opinions on the subject discussed. See you!