xi- High Rate of Return trading habits/rules, Small Trades and Trailing.
A.-
Trading Habits/Rules-
- Studying
charts:
Consistent practice will make you find new patterns, edges, and setups.
New edges and better analytical skills will boost your trading arsenal.
- Journaling
trades: Reviewing
past trades will help you understanding your mistakes. Tracking your
emotions during entries and exits can improve your psychological edge.
- Back
testing:
Back testing your system repeatedly, by correcting your mistakes, will
drastically improve your execution and self-discipline level.
- Planning
trades in advance: A step-by-step plan will help you control your enemies like
fear and greed.
- Checking
rules before a trade: Paste your trading rules in front of your
PC and check them before you take any trade. Trading is a long-term
business.
- Thinking
in probabilities: Thinking in probability will increase your mental accuracy
like nothing else in the world. Execute like a
robot and manage risk and trades like a casino.
- Increasing
goals gradually: Trading is the most rewarding business in the capitalism
era. Your effort and skills will compound 1000x your money, so break your
limits.
- Patience
and the love for trading will determine who will stay and who will quit.
- Trade
only in best Day Trading Stock. Best trading stock includes High
liquidity, Reasonable volatility, Sector Specific Stocks, Stock with good
correlation with overall market.
- Right
Entry, Exit and Stop Price. The first and foremost important
trade require to set an enter price, exit price as well as escape
price. Never underestimate the importance
of exit strategy.
- Market position with
Limit orders Instead of Market Orders.
- Do not do trading
Daily. Wait for the best opportunity possible. Your patience will
surely pay off.
- Trade
with money which you are ready to lose.
- Nobody
has made money in the Stock market consistently without the knowledge
& experience. The stock market respects and operation needs both. Never think that the Stock market as a part time
job. Time & experience teach a lot of lessons. Traders who learn
from their mistakes can earn, and others QUIT.
B. Importance
of small Trades in Controlling Emotions (and loss)- It is crucial to be
able to control your emotions in trading. How you trade decides to help keep
you stable emotionally or make you emotionally wreck. You may be trading in a
way which causes huge swings in not only your account but your emotions as well.
When you are emotionally erratic, it is impossible to consistently make good
trading decisions. This can spiral out of control and even cause you to blow
your account.
So, earning
like, 5k + 7k -2k+ 4k + 8k -2k =20k, is better than 50k - 80k + 30k - 20k + 40k
=20k. The second option will
leave you emotionally exhausted. This is why many traders fail to control their
emotions. You should reduce the size of your swings
- your wins may not be so big but your losses will not be so big either.
Less major swings in your account, the less emotional swings you will have in
your life. Trading is an emotional roller coaster
but it is up to you to decide how high and low you want the swing to be.
C. Trailing is a controversial and double-edged weapon in
profiting strategy- On one side it protects
the earned profit from loss but on the other hand it limits potential profit.
So, it is individual’s preference whether to
go for trailing or not. I think when you are in profit you can go for
potential maximum profit at the risk of single SL. On the other hand, if you are facing continuous drawdown and tasked with
rebuilding the capital, it can be a good strategy to go for NO-LOSS philosophy
and go for TRAILING.