A Balanced Approach in Trading ⚖️

How would you trade when market sentiments conflict with technical analysis (TA)?
Whatever trading tools you used, you need to know its limitation. TA limitation is it cannot predict price trend caused by market sentiment or emotional trading (fear, FOMO, greed etc).
Financial Analysis (FA)
Hence you need to know the other important tool - FA which covers the macro conditions that may affect the share price.
Stop loss Plan
No strategy is full proof. The back up plan is to set a stop loss percentage to stand by when market crash occurs. The recent SVB collapsed is a good example when price can crash 50% within an hour or worst stock suspended.
Diversify your portfolio
I covered this in my previous post. Even Gurus like Warren Buffett doesn't put all eggs in one basket. You can read the post here:
We need to diversify our portfolio like Berkshire Hathaway
The L word
I mean Leverage, avoid using it in trading at all cost. You can incur huge losses as the risk is everywhere just to name a few: financial crisis, recession and liquidity. Trade within your mean - don't gamble.
Bottom line
I use TA to predict price trend which will lower my risk when trading covered options. I don't use it to time the market and certainly not in highly volatile (high risk) penny stocks.
Source:
Technical Analysis – What is it? | Benefits of Technical Analysis