Many traders focus on managing trade entries and exits, seeking alpha. Most traders learn the hard way after having trouble with pressure, impulses, and ego force them not to execute their trading plan. Risk management generally is learned last, after discovering the impact that lost capital can have on confidence.
Regardless of your risk and rewards profile, a good investment portfolio needs diversification. Even though this reduces volatility, no portfolio is protected against risk or loss.
Candlestick charts are an analytical technique that transforms data into single price bars over multiple time frames. It makes them more valuable than conventional open-high, low-close bars or lines that link the closing price points. When charted, candlesticks generate trends that forecast price action. Proper color codes add depth to this technical tool first built by Japanese rice traders in the 18th century.
When a trader enters the market, any following price movement is based on market participants’ collective actions not any individual’s own opinions, hopes, and beliefs. While a trader can manage a trade via position size and exit strategies, he can not determine whether his stop loss or profit level is hit. A trader is at the market’s mercy to choose the future of each of their trades.
“What’s measured improves”― Peter Drucker Maintaining a trading journal is a smart strategy to increase efficiency and build trust in actions. Day trading performance requires high coordination and preparation level. Day traders need to go through a rigorous educational process to be consistently successful in trading. The best tool for directing and managing the frameworkContinue reading “A Traders Best Friend [30 Trading Journal Questions]”
With a price action strategy, the trader’s decision is made up through the current price movement.
Every year on December 1st, we start hearing a lot about a Santa Claus Rally but when exactly is it going to take place?
Risk management, a successful trading system, determination, self-control, and ambition are the best friends of a trader. Here are the biggest threats to a trader…
A stop loss is a weapon that you need to use to prevent a small loss from moving into a major loss. This may be your most important element in every trade, as big losses can drive an unsuccessful trading career.
Profitable trading does not involve opinions, predictions or even great stock tips. Successful trading is all about statistics, making more profit on good trades than you risk on unprofitable trades. Trading without knowing basic metrics induces in your system arbitrariness and chance. Knowing how to make the metrics work for your system will shift everythingContinue reading “Trading Metrics: Your Key to Profitability”
Does your trading strategy include moving averages? Laying a moving average like the standard combination of a 50 and 200 period MA to a chart can be very fascinating. You’ll start seeing trends emerge.
If you are just arbitrarily trading what you like without any real underlying process, procedure or strategy, the long-term odds of success are small. It is important that you create a system or strategy for yourself that helps you to trade in a manner that consistently works, reduces risk, and does not destructively put yourContinue reading “Ask These 10 Questions Every Trade”