Wednesday, 31 October 2012

Trading Mistakes # 0

 

Felt, I need to include these as well even though fairly trivial and have covered it in parts here Rules & Plan

Planning

Preparation is key ingredient for Success

having a well defined and lucid trading strategy which has been back-tested and demo/paper traded for good period of time – without this you will not have the belief and conviction in your trading setups and that’s when fear crops in …

 

Trading is Simple – Buy Low and Sell High OR Buy High and Sell Higher whichever way you look at it

 

Keep your Trade setups also simple and objective, you should able to explain it to your kid. They can be as simple as Price-Action based on Support and Resistance OR patterns – ABCD, Wolfe Wave, … OR simple MA cross overs, MACD cross overs … But, you should have practiced those setups on multiple charts and feel at peace with the setup in terms of expectancy, draw-downs, etc of the setup hence, backtesting is very important

 

Risk Management & Drawdowns are key aspects to keep you in the game during those trying times when nothing seems to work. Trade only with capital which you can afford to lose – Prepare for the worst and Aim for the Best … Remember, Scared money never wins in this game.

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