Archives of “January 11, 2019” day

rss

Three stages of trading objectives.

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #

To make money every trade. At first, I did not have the ability to make money every trade.  After I had the ability to make money on most trades I realized it was a horrible objective.  If you want to make money on every trade you are always waiting.  You can never take that much risk and hence the rewards are very small.  I was trading 1′s and 2′s to start, which was the right thing to do.  I would watch my mentor take every trade, no matter how dog shit it was.  As a 1 and 2 lot trader you do not have the same luxury to take dog shit trades because you can only trade one way.  Because of the flexibility he had he could do more and the truth is no matter how good or bad a trade looks we don’t know until we are in it. Getting the most out of a trade is the mark of good trader.  Risk is always related to reward.  There is very little money in making money on every trade.  This type of trading is like making 100k and keeping 80K

To make huge chunks of money.  After I realized that objective did not work for me I shifted to the extreme.  I started to swing for the fences whenever I had the ability.  It is nice when I was right but I struck out a lot too. At this point, I did not respect trading.  I did it because money made me a bad ass.  Well as you know you hard to pay your bills with bad ass.  This type of trading is like making 200k and keeping 80k.

Here are the major risks of having both of those objectives.  The first is making small amounts of money no matter the situation.  Eventually you will get in a hole because statistically you are behind.  Trading every situation the same is bad.  The second objective is trying to make huge amounts of money on every trade.  If the first trades were the best and I stopped it was great.  If the first trades were bad, I was forced to stop.  It made it hard to learn.

The 10 Components of a Successful Trading

  
  Education
#  #  #

1. The general market conditions for that specific trading day. For example is there a lot of volatility in the market, is the market trading lower or higher, ranging or trending?
2. Why you entered the trade, the time you entered the trade, and the price you entered the trade.
3. Why you exited the trade, the time you exited the trade, and the price you excited the trade.
4. Whether the trade was a long or short trade.
5. What happened with the market from the time you opened the trade to the time that you closed the trade.
6. The money management parameters you used in the trade and which we covered in our previous lessons on the subject.
7. Many traders will also attach a chart with their analysis on it to help them remember the trade when they review their trading journal.
8. Where you were weak that particular day and what you are going to do to address those weaknesses.
9. Where you were strong that day and what you are going to do to address those strengths.
10. Any other thoughts that you had that day which should be noted.

Go to top