Trading: The Difference Between Playing Offense & Defense

The sooner traders learn to carefully manage risk the better off they will be. So many new traders come in with only the thoughts of profits dancing in their heads. This is equivalent to a football team only focusing on scoring points and not planning their defense.In trading you must play both sides of the ball. You have to be able to score points against the market and not allow the market to score back those points on you.

Your entries are your offense and your exits are your defense.

Letting a winner run is your offense, cutting your loser short is your defense.

Your automatic buy stop is your offense and your automatic stop loss is your defense.

Buying a monster stock is an offensive move, planning on how you will exit with your profits is your defensive move.

Identifying a trend is your offensive play creating a trading plan on how to trade it is your defensive play.

Your choice on what to trade is playing offense, choosing your position size is playing defense. (more…)

THE GUESSING OF TRADING

Trading is based on our hypothesis. In other words trading amounts to our educated guesses, which means the more you invest in your education, the more likely you are to find yourself on the right side of the trade. One of the most widely overlooked parts of trading education by traders is the study of past charts. I make personal videos, so that like a football team I can review my plays and create better strategies.

Your chart will tell you almost every thing you need to know to get on the right side of the trade. The one thing it doesn’t tell you is what is going on behind the scenes and it will even give you a hint to that most of the time. Your bullish/bearish ENGULFING patterns are evidence that there are some secrets that the market keeps to itself.

Mastering your candlestick psychology, your support/resistance, and your trendlines are things that you want to major on and learn well. You may not win every trade, but having a firm foundation on these simple techniques can greatly increase your odds of a successful trade. I think the more simple your charts, the better and easier it is for you to enter a good trade.

Sometimes you will have the perfect trade set up and all of your analysis will be right and you will find yourself on the wrong side of the trade. No big deal, it happens to all of us, review that trade and see if you can identify the error. When you have reviewed it, look for the next trading opportunity. There is NO PERFECT TRADING STRATEGY!!!!!!! This is only a guessing game for those of us who like to play the odds. The better your education, the better your odds will be against the house.

Trading: The Difference Between Playing Offense & Defense

The sooner traders learn to carefully manage risk the better off they will be. So many new traders come in with only the thoughts of profits dancing in their heads. This is equivalent to a football team only focusing on scoring points and not planning their defense.In trading you must play both sides of the ball. You have to be able to score points against the market and not allow the market to score back those points on you.

Your entries are your offense and your exits are your defense.

Letting a winner run is your offense, cutting your loser short is your defense.

Your automatic buy stop is your offense and your automatic stop loss is your defense.

Buying a monster stock is an offensive move, planning on how you will exit with your profits is your defensive move.

Identifying a trend is your offensive play creating a trading plan on how to trade it is your defensive play. (more…)

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