Do you aim to become a trader that navigates that markets and exploits trading opportunities for profit? Its a great way to make a living and the rewards can be incredible, and not just financially. When you have the innate ability to find trades that go on to make BIG profits you have mastered a skill-set that most people only dream of.
Most People Fail – Find Out How To Avoid Disaster…
The sad truth is that MOST PEOPLE can’t do it. Most people don’t understand the concept of systematizing their trading to the extent that risk and reward can be managed like a business. If you opened an ice cream shop you would manage your inventory, ordering only that which sells without going bad, and paying only for advertising that continues to work.
You would manage your overhead to make sure that when it was time to pay the bills you had the money to do so, knowing that if you are SHORT on cash and can’t pay the bills from month to month that the business isn’t successful and getting the boot, is just a matter of time.
Unless your profiting EVERY MONTH its just a matter of time before everything falls apart. YES you can have a bad month or two, EVERYONE DOES, but at the end of the year you need to average a monthly profit or the Ice Cream shop is doomed!
With trading its the same thing accept you manage risk and reward and money. We do this by trading only the best set-ups that offer us the best win/loss possibilities. Just trades that are likely to go in our favor.
We trade only to a certain level based on how much money we have, knowing that loss is always possible, we have a profit target that makes sense and a stop loss to avoid disaster.
THEN we manage these variables, keep track of our activity so that we can measure the results and make adjustments.
Simple right? Go tell that to the hundreds of people a day that throw in the towel.
I’m not one to get to scientific about every detail but I do like to focus on the core imperative concepts.
1. Have a set of “set-ups” clearly defined that provide an edge. This can be very personal. You can take a “general set-up” and have nothing. However if you get into the details, and multiple time frames as well as defining low risk along with high odds you can end up with a fine tuned entry and exit that allow for fantastic profits and minimized risk.
2. Don’t clutter your chart with every indicator and aid on the planet. Use a few moving averages that help in determining trend strength, stick to simple support and resistance rules and focus on the breakout patterns that clearly define a breakout.
3. And Finally – Your set-ups must rely on swing structure. Swing structure paints a path to trend direction, tells us when a trend is coming to an end AND when you use multiple time frames, allows you to determine with great accuracy, where price will likely move to next. The only thing you need to do with swing structure is … See #1