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Your Trading Method-10 Points
1.“Trade What’s Happening…Not What You Think Is Gonna Happen.” – Doug Gregory
2. Go long strength; sell weakness short in your time frame.
3. Find your edge over other traders.
4. Your trading system must be built on quantifiable facts not opinions.
5. Trade the chart not the news.
6. A robust trading system must either be designed to have a large winning percentage of trades or big wins and small losses.
7. Only take trades that have a skewed risk reward in your favor.
8. The answer to the question, “What’s the trend?” is the question, “What’s your timeframe?” – Richard Weissman. Trade primarily in the direction that a market is trending in on your time frame until the end when it bends.
9. Only take real entries that have an edge, avoid being caught up in the meaningless noise.
10. Place your stop losses outside the range of noise so you are only stopped out when you are likely wrong.
The 7 rules of Managing Risk
1.)Overcome fear
2.) Remain flexible – When you don’t know what’s going to happen, the best strategy is to be ready for anything.
3.) Take reasoned risks – reasonable exposure and positive edges only.
A Reasoned risk is more like an educated guess rather than a roll of the dice. A Reasoned risk limits exposure so that one or a few trades will not affect the trader’s account too adversely should the trades turn out badly. Great traders aren’t gamblers.
4.) Prepare to be wrong
5.) Actively seek reality
6.) Respond quickly to change – When a trader determined a place to get out of the trade, a competent trader will respond quickly and get out, thereby reducing his exposure to continued uncertainty to zero.
7.) Focus on decisions, not outcomes.
Vision
While total clairvoyance as to future price movement is unrealistic. It is my goal as a trader to assimilate as much information as possible with the goal of playing out scenarios that tie in together. It’s not always easy to do, yet understanding trading does not occur in a vacuum and markets do exhibit funny things get you mentally prepared to deal with these outlier events. Those that can think for themselves and need not rely on templatized news releases for their ideas usually put themselves in a position to benefit from their forward thinking. We have heard many times about leaders who saw an industry trend before it happened. This was no accident. It came as a result of their understanding of their field and what could change it for the better. Traders who gain an understanding of how things can potentially play out and factor that into their trading strategy go a long way to keeping their objectivity when things unfold in a fast and volatile market. |
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100% You will lose Money
| You are entering a position out of EMOTIONS or ANTICIPATION at wrong price level in a WRONG scrip with GREED or HOPE with no pre-entry exit in the place – even worst, once in a trade, riding the position with HOPE without STOP LOSS even if it goes against the entry – adding more to average down in the entirely wrong trade – at last running out PATIENCES and out of FRUSTRATION booking huge LOSS. Even the position is in PORFIT there is no STOP LOSS or pre-entry EXIT in place – exiting the position abruptly in FEAR booking just a small profit with FEAR that market may take this small profit too – these random small profits unable to compensate earlier big losses! To cover big losses you try more and more RANDOM trades and above process continues – end result it challenges your EGO and creates more FEAR, more AGONY – cycle continues with small profits and big losses – until account is wiped off. |
Don’t trade for the thrill-Jesse Livermore
“The desire for constant action irrespective of underlying conditions is responsible for many losses on Wall Street even among the professionals, who feel that they must take home some money every day, as though they were working for regular wages. Remember this: When you are doing nothing, those speculators who feel they must trade day in and day out, are laying the foundation for your next venture. You will reap benefits from their mistakes.”
Once you realise the cost of trading and the benefits of being able to sit tight in a market you learn a valuable lesson.
Once you’ve learnt this lesson, you can look at all the other investors on Wall Street and realise how they are actually helping you in your quest.
They’re all trading in and out of the market, every day racking up huge commission fees and losing money. This reveals the opportunity for you to take advantage of. By sitting on your hands and waiting for the profits to roll in, by only making calculated bets.
Always trade according to the trend and according to your plan.
The desire for action will be strong but you need to resist. Because that is the gambling mindset. The professional trader mindset simply sits tight and waits for the opportunities to come to him.
Remember that when you trade, you don’t only pay a fee to your broker and a commission but you pay the spread too.
Top countries for a long, healthy life
India -Deficit fears
Daniel Tenengauzer, co-head of global emerging markets fixed income strategy and economics at BofA Merrill Lynch Global Research, is not convinced by the buzz surrounding India. ‘Compared to the rest of Asia, India is not the best story.’
‘My problem with the Indian story is fiscal. The government spends a lot of money which has increased the country’s current account deficit. The fiscal deficit for this year is -10.6% – China’s is half of that.’