Naz
Experienced member
- Messages
- 1,391
- Likes
- 25
As Market participants we are all governed by the fear and greed of the markets.Each day we trade we use signals to indicate which way we think the market may go.
However isn't the best way to make money is to react to what the market does and forget our opinion.If we react to market moves as they unfold with a trading strategy then we take away our opinions and our profits are governed by our discipline in following our rules.
First we need a trading platform that gives us access to the markets with the ability to trade both long and short.If we cant do this we are subconsciously at a disadvantage as our opinion on making profits will only be focused in one direction.Remember we react to moves both up and down and not just one direction.
Then we must make sure that our PC and communication links are up to scratch.There is nothing more frustrating than getting all the trading correct only to be let down at the most important time by your equipment.
A simple plan may be to buy or sell short at an important level with a stop 1 unit of price away with a reward of three price units.This gives each trade a risk reward of 3 to 1.We can see from this type of trading that if we took ten trades five could give us a possible profit of UP TO 15 units whilst our losses would definitely be 5 units.So we could be wrong 50% of the time and still make money.
However to make sure this worked we would have to ensure that our discipline took us out at our stop and we use a trailing stop on our profits as they progressed.It would therefore be advantageous if the software platform used allowed us to enter automatic stops and trailing stops triggered by the software to help us with the discipline in trading our plan.
Finally we need to keep our costs down and maybe consider using a system where we don't pay stamp duty and either the spreads are extremely close or we have the ability to not pay them as on my trading exchange the Nasdaq.
This is a personal view and not intended as any financial advice.
However isn't the best way to make money is to react to what the market does and forget our opinion.If we react to market moves as they unfold with a trading strategy then we take away our opinions and our profits are governed by our discipline in following our rules.
First we need a trading platform that gives us access to the markets with the ability to trade both long and short.If we cant do this we are subconsciously at a disadvantage as our opinion on making profits will only be focused in one direction.Remember we react to moves both up and down and not just one direction.
Then we must make sure that our PC and communication links are up to scratch.There is nothing more frustrating than getting all the trading correct only to be let down at the most important time by your equipment.
A simple plan may be to buy or sell short at an important level with a stop 1 unit of price away with a reward of three price units.This gives each trade a risk reward of 3 to 1.We can see from this type of trading that if we took ten trades five could give us a possible profit of UP TO 15 units whilst our losses would definitely be 5 units.So we could be wrong 50% of the time and still make money.
However to make sure this worked we would have to ensure that our discipline took us out at our stop and we use a trailing stop on our profits as they progressed.It would therefore be advantageous if the software platform used allowed us to enter automatic stops and trailing stops triggered by the software to help us with the discipline in trading our plan.
Finally we need to keep our costs down and maybe consider using a system where we don't pay stamp duty and either the spreads are extremely close or we have the ability to not pay them as on my trading exchange the Nasdaq.
This is a personal view and not intended as any financial advice.
