Things to consider before taking any trade
These are some rules that I created based on what works for me and how I go about trading any ticker. I never enter any trade without consulting these rules as this just comes with time and learning what to do as well as what not to do. I’ve had my fair share of big wins and big losses the key is to minimize the losses and be even keel with your emotions throughout the day. The more experience you have, the more consistency you see, the more confidence you will have and the more fun trading will be.
- No Trend = No Trade – Avoid the choppy times and slow times (11:30am – 2:30pm)
- Wait for confirmation to enter and exit, use pullbacks and pushes – Use support and resistance, wait for breaks in those to take a position. Wait for breakouts (long) and washouts (short) to enter
- Have a plan for every trade, when you’re plan doesn’t work, cut losses and move on – Don’t get emotionally attached or biased on a stock, you will get burned
- Lock in profits into support/resistance and breakouts/breakdowns – Learn to scale in and scale out based on key levels and indicators
- Know what your trading!!! – Don’t enter a ticker until you understand why it’s moving and what it is i.e. – ETF, ADR, Leveraged, etc.
- Have a daily goal but not a daily expectation. Prove to yourself you can make X/day but don’t expect it, that’s when bad things happen. If you’re new, your goal is just be consistent not on the profits or money you can make.
- Don’t be a “hindsight trader”! Learn from every trade good or bad on what you did right, what you did wrong and what you will do better next time.
- If you take a loss, forget about it, clear your mind and refocus. Recap at the end of the day where you went wrong, why you were wrong, then fix it. Never revenge trade!
- Have a short memory – don’t get too high or too low, stay focused and humble during the trading day