Trading Style
. . There are mainly three different trading approaches: . 1. Trend trading (often long-term oriented) 2. Swing trading (often mid-term oriented) 3. Scalp trading (short term oriented) Of course it is possible to trade in every of these fashions, but for starters this can be really difficult and it is better, in my opinion, to choose one of them. This is due to the fact, that they have very different characteristics, which I will elaborate on in the following. Trend trading: This approach is mostly longer-term oriented, although some of you might say, you can also follow a trend on the basis of a 30-minute chart. Of course, you can! But for me these short-term movements are more a directional bias than a real trend. Think of this: On a 30-minute chart you have identified a trend (higher lows). Switching to a 4-hour chart can then perhaps show you, that this is just a correction from the underlying trend. So for me “real” trend trading is more long-term oriented, starting with approximately 1-day until several weeks. This trading style should fit people which like to hit “big winners” and can afford to have many “smaller losers.” You [...]
READ MORE5 Uncommon Rules of Traders
In fact, I’d bet that deep down you know you should be following these rules as well but you aren’t – yet. Today is the day you can commit to doing what works for other wealthy traders and get on that same path. . . Let’s get started. . 1. They plan every single trade. EVERY SINGLE ONE. Every trader I’ve talked with that makes money consistently knows the following about every single trade they take before they even begin entering a limit order into their trading platform: The highest price they are willing to pay (if they are going long) or the lowest price at which they are willing to sell (if they are going short) Their profit target where they will exit if they are “right” Their stop loss where they will exit if they are “wrong”The risk/reward ratio of the trade The exact percentage of their account they are risking Lots of traders do one or two of these things. Few do all of them. In simple terms they know exactly what they want to pay, how much money they anticipate making (or losing) and a very clear idea on the probability of the trade working out. [...]
READ MOREWhat is your Game(Trade) Plan…?
. The Trading Plan comes first and should account for the following parameters: 1. Entering a trade. 2. Exiting a trade. 3. Stop Placement. 4. Position Sizing. 5. Money Management. 6. What to Trade. 7. Trading Time Frames. 8. Back Testing. 9. Performance Review. 10. Risk vs. Reward. . . The Game Plan consists of putting the parameters of the Trading Plan to work in day to day trading with the following benefits: 1. It will force the trader to select a trading style. 2. It will encourage market study. 3. It will aide in helping pick the correct trades. 4. It will prepare the trader for what the market has to offer. 5. It will help in properly monitoring and exiting trades. 6. It will keep the trader from over-trading. 7. It will help with finances. 8. It will keep the trader focused. 9. It will take the gambling out of trading. 10. It will make a better trader out of you. .
READ MORETrading with Dirty Words Trading…!
Should- Phrases include: “The market should have” and “I should have”. Those phrases are often used to socialize losses. They are a strong signal something is off. They should be used to aid you in correcting your vision not make you feel better. Must- Phrases include: “The market must…”, “I must make money”, or “I must trade”. The market does not have to do anything and neither do you. When you use the word “must” it is hardly ever from a position of strength. The market knows when you are desperate and will take full advantage of you. Keeping your expenses as low as possible will make it easier to not make those statements. Won’t- Phrases include: “The market won’t…” or “I won’t make money”. Notice a theme here? You are part of the market, you are not the market. Not getting what you expect, even if it is positive, confuses the brain. If you expect to lose and don’t it is still a bad outcome. Your brain is going through enough as it is. The market is a one way walkie talkie, you listen, it talks. Can’t- Phrases include: “The market can’t..” or “I can’t…” or “I can’t lose [...]
READ MOREGolden Rule For Traders
1. You Must Have a Game Plan 2. You Should Follow the Game Plan 3. Always Trade With a Stop Loss 4. Diversify Your Trades 5. Trade the Big Moves While Filtering Out the Small 6. Trade With the Overall Trend 7. Do Not Listen to the News; Only the Market 8. Don’t Listen to Your Broker. 9. Have Money Management Rules 10. Most Important: Have the Discipline to Follow the Rules
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