Stock Trading- (Day Trading)-11

                              xi- High Rate of Return trading habits/rules, Small Trades and Trailing.

A.- Trading Habits/Rules-

1. Studying charts:  Consistent practice will make you find new patterns, edges, and setups. New edges and better analytical skills will boost your trading arsenal.
2. Journaling trades: Reviewing past trades will help you understanding your mistakes. Tracking your emotions during entries and exits can improve your psychological edge.
3. Back testing: Back testing your system repeatedly, by correcting your mistakes, will drastically improve your execution and self-discipline level.
4. Planning trades in advance: A step-by-step plan will help you control your enemies like fear and greed.
5. 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.
6. 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.
7. 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.
8. Patience and the love for trading will determine who will stay and who will quit.
9. 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.
10. 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.
11. Market position with Limit orders Instead of Market Orders. 
12. Do not do trading Daily.  Wait for the best opportunity possible. Your patience will surely pay off.
13. Trade with money which you are ready to lose. 
14. 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.