Archives of “January 12, 2019” day

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9 Steps for Traders

  
  Education
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1- When you see a trade setup you like, pull the trigger without hesitation

It looks so simple but it isn’t! If your mind is not 100% ready to take the trades when they present themselves to you, you’ll miss them, you’ll be just watching and will let them go without any apparent reason why, and then when you realize what you just did, your reaction is to get angry! Just to make you jump into an unplanned trade and lose… Prepare in advance, market is like playing chess, you have to look ahead for the next move.

2 – Always use STOPs

In case you don’t like to use physical stops, make sure you’ll be able to stop in case it breaks the limits you’ve set for that trade

 

3 – Anything can happen

Try to start the morning with a free state of mind so that you’ll be able “to listen” to the market.

4 – Always lower your trade size when you’re losing

If you make two losing trades in a row, lower trade size until you get in tune with the market again.

5 – Never turn a winning trade into a loser

That’s the reason why I like to take small portions of profit when market makes it available to me, I hate to see a winner turn into a loser, manage your trades well.

6 – Buy or develop a system and stick to it, don’t change it from day to day

Find a trading system that fits your personality and once you have it, if it gives you an edge, stick to it, don’t change it because it didn’t work on one or two days, otherwise you’ll keep changing systems forever and that means: losing money.

7 – Get out of losers

One of the most known market adages is: “Cut your losses and let your profits run.” Much easier said than done, but it’s very important that you do it, usually it’s much easier to do exactly the opposite… make sure you bear that in mind.

8 – Don’t worry about news

This one I like very much, the only thing news will do is to accelerate the targets, nothing else, most of the time, I completely trash the news and just follow what I see on my map.

9 – Monitor your progress, create your own trading journal

It is very important that you have a trading journal to track your success, so that you’ll be able to stop what you’re doing wrong and keep your strong strategies. I’ll talk about this in detail on my next post.

Hope this helps, happy trading!

Technically Yours

ASR TEAM


Learn to be Disloyal

  
  Education
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Loyalty many be a virtue in family ,friends ,and pets ,but it is a fatal flaw for a trader.Never have loyalty to a position.The novice trader will have  lots of loyalty to his original position.He will ignore signs that he is on the wrong side of the market ,riding his trade into a large loss while hoping for best.The more experience trader ,having learned the importance of money management will exit quickly once it is apparent  he has made a bad trade.However ,the truly skilled trader will be able to do a 180- degree turn ,reversing his position at a loss if market behaviour  points to such a course of action.

6 Elements of Trading

  
  Education
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1) What you’re trading – Why are you selecting one instrument to trade (one stock, one index) versus others? Which instruments maximize reward relative to risk?

2) How much you’re trading – How much of your capital are you going to allocate to the trade idea versus other ideas?

3) Why you’re trading – What is the rationale for the trade? Why does the trade idea provide you with an “edge”?

4) What will take you out of the trade – What would lead you to determine that your trade idea is wrong? What would tell you that the trade has reached its profit potential?

5) Where you will enter the trade – Given the criteria that would take you out of the trade, where will you execute your idea to maximize the reward you’ll obtain relative to the risk you’ll be taking?

6) How you will manage the trade – What would have to happen to convince you to add to the trade, scale out of it, and/or tighten your stop loss?

A beginning trader will take time to answer these questions, much as a new driver will need time to properly steer and brake a car. With experience, however, planning can occur very quickly, as much of a trader’s homework is accomplished before the market opens. For instance, before the open, I already have identified the short- and intermediate-term trend of the market; pivot points that will serve as profit targets; and volatility that will guide my position sizing. From there, much of the trade is a function of pattern recognition and execution–seeing selling or buying dry up in a rising or falling market and entering the trade at a level in which I’ll make more by hitting my target than by hitting my stop. 

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Two Rules for Traders

  
  Education
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In a losing game such as trading, we shall start against the majority and assume we are wrong until proven correct! (We do not assume we are correct until proven wrong.) Positions established must be reduced and removed until or unless the market proves the position correct! (We allow the market to verify correct positions.)

 

Rule Number Two :

Press your winners correctly without exception.

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