Tips for Successful Trading

By | June 25, 2013

Trading Methodology:

  1. Winning system-Only trade tested systems with a positive expectancy in the long term.
  2. Faith– Your system has to allow you to trade your beliefs about the market.
  3. Risk/Reward-Never trade unless your profit expectations are greater than your capital at risk.

Trader Psychology:

  1. Discipline-You have to keep trading your method even when it doesn’t work for a given time period.
  2. Ego-Admit when you are wrong.
  3. Emotions-Trade the math not your emotions.

Risk Management:

  1.  Risk of Ruin-Never risk more than 1% of your total account capital on any one trade.
  2. Position Sizing-Use your capital at risk to understand the right amount to trade based on the securities volatility.
  3. Capital at risk: Never put more than 6% of your total capital at risk at any given time on all positions.
  4. Trailing stops- Always have an exit strategy to lock in your winners.

Leave a Reply