Trading for living
How to analyze markets & trade them successfully
3 Pillars of Trading - Psychology, Market analysis & Trading system, Money management.
- If one of the pillars goes down, it'll hurt you
- If you can't stick with it, it's no use.
- String of losses + poor money management = destroyed account
How to keep your emotion in check.
- you may have to spend just as much time analyzing yourself as you spend on analyzing the markets
- adopt a probabilistic mindset
- be realistic
- keep a diary of your trades
- setup rules before entering
- how to exit the trade
- if poor performance then stop trading
- don't count money
- practice sound money management.
One indicator to rule them all (nope)
- Exponential is better than normal averages
- watch related markets
- need a bigger fishing rod to catch bigger fish
- start with few indicators, add more of them when you are comfortable
The triple screen trading system
- Market tide - weekly macd
- Market wave - oscillator 2 day exponential
- intraday breakout
Weekly trend - Daily Trend - action - order
up - up - stand aside - nothing
up - down - go long - trailing buy stop
down - down - stand aside - nothing
down - up - go short - trailing sell stop
Money management 101
Survival - never risk more than 2% of equity
- Account $10000 then the max risk is 2% which is $200 share bought 20 (max) lower stop no
- Steady returns - enforce with a stop loss
- high returns - move to stop in your direction