Nowadays we often hear stories of traders off the entire account or people who just started with 100k 20k to close in a very short period. Again and again when I talk with people trading in my career, I have often heard phrases like 'It is too risky for me .. " or "the market is scary now, is how they treat you?" Usually my answer is: "Is not that what the market is covered, so that I processing market."
What most peoplebecause most were not aware of a plan of action. After a plan means many things. Indeed. People who are successful in other professions, in general, it all started with a level of trading as a business and should be treated. When looking for a personal loan or a business looking for help to start a business, most of the time, you hear the other party says "Ok, let's see your business" or "What have you Planned?" People want to knowwhere you come from. It 'also sold. Why do you want your hard earned money at stake on the market without knowing what might or might not happen? Markets do not care about you or your feelings. They want to take your money in the blink of an eye, it is therefore essential that a plan of action.
Here are some things you should write:
What markets can I trade? (For example, Stocks, Futures)
What do I do? (Daily, intradaymonthly)
What percentage of my capital risk per trade can I?
I need a plan that has a positive expectation for production?
What is my risk to trade for?
What is my monthly / quarterly goals?
What year is my purpose?
After these written requests, spend the time to respond fully. You really should do it, because how you behave CHANGE. Now if you have a question, and do not have an answer I need a plan that ensurespositive expectations', you have to do is really the time to research and get a plan and it does. If one of your plans you created, tested, you know? Back-testing is by far one of the main components are a successful company. Why do I say? Here's an example. If you are a company and want someone to take, you will just let the first person who walked in the door get to work? Very probably not. What I do is interview a fewcandidates and decide which person is best for your business. But what really if you had the interview? Well, you're doing is to find out whether you unconsciously analyze whether this person will have a positive expectation of your business produces. Want someone that will make you money and lost rental car or customers? Of course not!
It 'also sold. You want a business model that will be a net positivecollected. You may not be a loser and make it a winner. So it is very important is a model for testing. After the test you know what to expect. If the test says 200 branches and discovered that 130 of them were winners and that your winners was 1.5 times greater than your losses, meaning to tell you? It tells you that you have a positive place. So now when you start trading with real capital and your next 200 trades, you lose 70 of them, should notSurprise. Losing trades are part of the business daily, weekly, monthly, yearly.
The book trade in the Zone, Mark Douglas makes a big statement that I consider important. He says:
I am a consistent winner:
I objectively identify my edges
I define risk for each trade
I fully accept the risk or would be willing to free trade
I act on my edges without reservation or doubt
I want to pay me when the market makes moneyat my disposal
I constantly monitor my susceptibility for errors
I understand the absolute necessity of these principles for sustainable success, so I always follow them with confidence and joy.
What you should know about his statements is that he assumes that you did the first set of balls on top and was made a plan and you have a set of rules. Now I wonder how can I tell if my set of rules now workthe next month or next year? great question. The market dates back to 1700. There are literally a couple of hundred years of data. Then repeat the test is very important. Now, does not mean you should test the 200 years of data. Not even close. You want to test for a reasonable time, depending on the time on the case. For example, if I trade based on a system every day, so I'll probably back-test over the last 5-6 years. If I'm going to act on an intra-dayPlan 3 minutes, I'll probably back-test about a year.
There is no way of knowing what will happen, but trade is reduced to very low probability. Again and again the same things tend to repeat. Why do you think the market tends to do the same things again and again. Because it seems that some files in the same class look the same in terms of graphics? How does a large company will report quarterly results, but still go? This is because amany traders think it is true that a title is too much or too little. Why do you think there are people who talk about a "recession" at this moment? Again, this is because the same thing seems to be, a recession of the past and people who have faith.
What does this mean? What can you collect from? Well, actually some things. One is to ensure that you do, find and organize a plan of action. Think about that ifa company wanted to open up. Provides research and find out how some of these dealers started and what they did. Once this is done, write your plan and see to your questions from below. If you can answer them all, so as to move an operator consistently profitable. So take a look at what Mark Douglas wrote. You had your own mental states. You really think you're a consistent winner, because all the above statements.
Rememberyou are a business to start, and if your business to succeed, you need a plan to have!
"Plan your trade and your level" – Anonymous