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9 Trading Lessons for Traders

  
  Education
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  1. You have to be able to lose in order to win.
  2. Always be realistic with your monthly target.
  3. It is absolutely OK, and most of time, helpful to shutdown all social networking such as twitter, stocktwits, facebook. Think about it, if your friend is affecting your work, tell him to come back later. Trading is about concentration, and definitely a personal and lonely business. To be a successful trader, we must walk alone in our days and do it alone.
  4. If you are really seriously addicted to twitter, try to challenge tweets who call trade, instead of following them.
  5. When your position is right, you have to do nothing instead of doing nothing when you are wrong! [constantly taking early profit will do you more harm than good]
  6. You must keep your losses small and take more small losses than small winners to come out ahead. You will become the best trader you can be by being wrong small, not right small.
  7. It is your job to know your are wrong and not the market’s job.
  8. You have to press your winners if you really consider yourself to have the ability to make a living or extra income from trading.
  9. When you place a trade, don’t ever think this is the only trade to make. There are thousands of trades you can make. You aren’t going to miss a move for long if you trade correctly. You aren’t going to chase markets if you trade correctly. You must have a plan to enter positions based on each market’s criteria.

TRADE OPPORTUNITY, NOT YOUR MOOD

  
  Education

You want to be trading opportunity, not your mood of the moment. – Brett Steenbarger

Is it time to be aggressive?

Are you sleeping today thinking how much money you’ll make tomorrow?  Are you counting your profits before you’ve even sold it?  Are you imagining tomorrow’s going to be another strongly trending up day?  Believe me… you are not alone.  Upward strong momentum following upside strong surprises releases euphoria in every person.  In fact, it is these types of strong markets that fuels even stronger performances in the weeks ahead.  Or is it?

So before we rely solely on our human instincts to be greedy and hold all our positions, the first thing we should do is to analyze the charts with a keener eye on volumes other than prices and perhaps check up on what our history teachers have to say. Take away all our biases, and hopefully be mentally flexible to adopt with the perception of the markets, employ sound management practices while profiting with the trend.

Basically, you and I are both thinking the same thing.  We both have the same dilemma:

1.) We both don’t want to lose our hefty short term gains.

2.) We both don’t want to sell too early either (i.e. we want to maximize our gains even further).

Ten Times When A Trader Should do Nothing

  
  Education
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Ten Times When A Trader Should do Nothing

  1. When you are confused and don’t know what to do, do nothing.
  2. There are no set ups on your watch list, then don’t trade.
  3. You are a trend trader and there is no trend to trade.
  4. The market is extremely volatile due to headline risk.
  5. You want to make an option trade but the options are illiquid with a huge bid ask spread.
  6. If you are trying to trade supply and demand but the government keeps interfering with your market, pick a different market.
  7. Your stock reports earnings the next day and you expect a powerful move but it could easily go either way, wait until after earnings to trade.
  8. You are a momentum trader but their is not momentum, then wait.
  9. You play the long side only and the market is in a correction or a bear market, wait for a new trend to the upside.
  10. If you are not at your best mentally and emotionally then don’t trade until you are.

Better to Be Profitable Than Right

  
  Education
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ego” when trading futures.Mark Cook, a well-respected trader and trading educator from rural Ohio, for many years has stressed that traders need to lose their egos before getting into trading futures markets. He is also an advocate of survival in futures trading. 
One must survive in this challenging arena before one can succeed. I enjoyed listening to Mark at a trading seminar a few years ago. He even used to wear bib-overalls (with no shirt) at some of his trading seminars—just to drive home the point that trading futures is not easy and that ultimate success takes a lot of hard work. 
My good friend and respected trader and educator Glen Ring also espouses the notion, and may have even coined the phrase, “it’s better to be profitable than right in futures trading.” Those who know or have talked to Glen know he, too, is a no-nonsense, no-hype trader who takes a yeoman’s approach to the business. When asked what direction a specific market “will” go in the future, Glen is never afraid to say, “I don’t know,” before he adds that, “successful trading is nota business of predictions but one of probabilities based on past price history.”  (more…)

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