Archives of “term capital growth” tag

rss

You Are Having Trading Skill or You are Lucky ?

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #

Traders with skill have large gains after 100 trades and are relatively quiet, traders that were lucky have huge gains after a few trades and are very loud, then very quiet for the next few trades that usually bring their account to zero.

Traders with skill risk 1% to 2% of their trading capital per trade and win in the long term, traders that are just lucky risk the majority of their account for a few big wins in the short term but lose in the long term when their luck runs out.

Traders with skill use a successful method with many stocks in different markets, traders with just luck are only successful with one stock and when its up trend ends their winning streak ends.

Traders with skill have winning track records over many years, traders with only luck only have winning track records measured in months.

Traders with skill have risk management as a top priority, traders with only luck do not understand why risk management is important, yet.

Traders with skill are trading like it is a business, traders operating with luck are trading like they are a gambler in a casino.

Traders with skill use a trading plan and back tested method, traders with luck make guesses and are sometimes right.

Traders with skill have done their homework, traders with luck think they are naturally smarter than the market.

Traders with skill are disciplined and stick to their system, traders with luck make bets based on opinions.

Would you rather be lucky for a few trades or skillful for a few years? Lucky traders give back their profits when their luck runs out. Skillful traders are eventually financially interdependent due to their long term capital growth.

The Top Ten Similiarities of Winning Traders

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #

You can read trading, books until you are red-eyed, you can spend thousands of dollars on seminars, you can try to get successful traders to give you the secret sauce of trading or the Holy Grail. But, in the end it is simply you versus the markets. You have to pick your system, your risk tolerance, and take the heat in your own account, it will be your own money you lose.

No one can tell you the right system and method for you. If you can take draw downs in equity mixed with long term capital growth then trend following may be for you. If you love playing the hottest stocks in the market then CAN-SLIM or the Darvas System may be the right systems for you. If you just have little patience and love action then you can join the few who have mastered day trading. There really is no right system for everyone, it depends on what you can handle. However here is what all winning traders must have  to win in the markets regardless of time frame and system:

Trading System

  • They trade a robust system or method that wins more money over time than it loses.
  • Their system gives them a reward to risk ratio that is in their favor.
  • Their system or method is proven to work with a live trading record over many markets and trades or has  historical back testing. (more…)
Go to top