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RT's
The problems that I have had and others I'm sure is called consistency in
their trading. Those that I have helped all want to re-enter a trade after
being stopped out, all want to trade, trade, trade or better known as
overtrading when there is not a clear signal to enter. When stopped out of
your position at breakeven stop, the market is telling you that it does not
want to go the direction you decide to trade towards. Don't make matters bad,
be happy that you only lost commissions and not a few hundred dollars. Don't
just get into a market because "it looks like" it will go the way you want to
trade towards. The market normally look a certain way but one needs to hold a
mirror to their screen and see the reflection of what is really going on. Our
mind plays tricks on us as far as what we see, throw in some bias, and if you
do not have a well tested method, the markets will take your money. When you
get the "feeling" that a market in going to go in a certain direction, walk
around the block till you lose that feeling unless of course you can test that
"feeling".
My biggest battle with those I teach is not explaining all the rules or
remembering the rules, but all try to form rules that are not there, anything
to get back into a certain trade or find a trade that is not there in the
first place. Not having a position on can be difficult for many to except, but
why would you want to be in a trade unless it "fits" all the rules that you
have backtested. Another battle is we may be ahead by a few thousand dollars
and have a breakeven stop. Many young traders want to take the quick profit,
but are slow to cut losses. If you take profits too quick and your backtested
methods have proven to stay in the market, one will never get the 2-3 great
trades per year, by taking small profits, all the small trader can hope to
achieve is a breakeven year for the long term position trader.
Oat
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