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Trading Wisdom

We all need to be disciplined along with using good money and risk management skills, yet too much of anything can cause problems.

Sometimes we put so much attention on caution to ensure that we only make good trades that we reduce our actions to the point that we miss so many strong trading opportunities.

Every time we begin our trading sessions, we need to communicate to ourselves that we will be confident, prepared and most importantly… committed to executing trades when our analysis shows that a good trade is in front of us.

Never allow the market, the news, your friends, your past trading session or anything else send you a false signal that causes you to sit back and do nothing when you can easily see from your training that you should execute a trade right now.

Enthusiasm Brings About A Triumph

The greatest victories in life rarely come from those who are sad, pessimistic or lacking enthusiasm.
When we approach challenges in any area with enthusiasm, we set a new foundation that starts us off on the right foot. This does not automatically happen. We all need to decide that we are going to start changing the way we begin our trading sessions.
Before we jump on our computer and look at our charts and start executing trades, take about 15 minutes to set the tone for this session. Take a few deep breaths, forget about the list of tasks that you have to deal with today, get a piece of paper and write down 1 or 2 items that you will focus on during today’s trades.
Once you have your mind set and your 2 items ready; say out loud “I am ready to trade”. Say this with enthusiasm and then sit down and begin.
You will have a new perspective on today which does not include focusing on the profit results, but instead on the process. Your trading session will have new meaning and you are now set to be triumphant in today’s trades.

Never turn a winner into a loser.

015254790We have all violated this rule. However, it should be our goal to try harder not to violate it in the future. What we are really talking about here is the greed factor. The market has rewarded you by moving in the direction of your position, however, you are not satisfied with a small winner. Thus you hold onto the trade in the hopes of a larger gain, only to watch the market turn and move against you. Of course, inevitably you now hesitate and the trade further deteriorates into a substantial loss.

 There’s no need to be greedy. It’s only one trade. You’ll make many more trades throughout the session and many more throughout the next trading sessions. Opportunity exists in the marketplace all of the time. Remember: No one trade should make or break your performance for the day. Don’t be greedy.

TRADING MANTRA'S

trading-mantrasEven the best traders in the market have trading sessions that are less than optimal.  Human nature dictates that we make mistakes, and trading the stock market is no exception.  Subsequently, there is always room for improvement, whether you are a novice trader or a seasoned veteran. 

  1. Stick to Your Guns – Don’t try to run from the market.  The only way to boost trading profits is to stay in the game and keep trading.  Running from the trades and the action will keep you out of the market, whether it is hot or cold.  Sticking to your trading plan and enacting trading discipline are the keys to producing profits.

 

  1. Set Stop Losses and Take Profits – “Set and forget” trading is generally profitable.  When you place each trade, remember to place your exit and stop loss, and then let the market be your guide.  Have a preset limit of how much you’re willing to win and how much you can lose.  Technical analysis will tell you the best price for selling (near resistance) and the best place for buying (near support).  Support and resistance points are the best places to put limit orders. (more…)