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Seven Sins of Trading

  
  Education
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7numbers1. Trading an inappropriate position size.
Simply put…if you risk too much, you’ll lose too much. In my eyes, this is the single most important rule of trading. Risking only 1-2% of an acct value is crucial to staying in the game.

2. Not knowing when to take the loss.
If you cannot answer the questions “Where am I taking the loss,” and “Where is my profit target” then stay out of the market. If you leave these decisions for later, then you will make them emotionally, which will be the worst decisions a trader can make.
3. Trading on someone else’s research or recommendation.
We have all heard stock tips thrown our way. Sometimes we might even hear people throw out potential trades that they are watching and become tempted to jump in. Sometimes I throw out stocks that I am trading and I am watching. The problem is that you might not know what this person is watching for, what strategy this stock fits, or what types of efforts are thrown into their research. If you take these stocks into consideration, make sure they are trades you would have likely come across on your own by conducting your own research. (more…)

Nugget's from Nisons Beyond Candlesticks book.

  
  Education
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Beyondcandlestick

Here’s the first nugget from Nisons Beyond Candlesticks book.

(It’s A BIBLE and my Hot favourite Book )

“A single candle by itself is rarely sufficient reason to forecast an immediate
reversal” (21)

When you cannot see the state of your opponent, you pretend to make a powerful attack to uncover the intention of the enemy. This concept, as related to trading, is one of the reasons a spring is so important. 57

In effect, these traders act like the aforementioned “moving shadow,” testing the battlefield by entering a large order to try and break support (or resistance). (more…)

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