Tuesday, October 11, 2011

Aiming for a better trade

This post gets its ideas from the SMB Training Blog . You should read their full post. The basic theme is this: what factors contribute to a well made trade? A well made trade will not always result in a profit. But, it provides satisfaction to the trader for correctly identifying, then executing the trade. This is what the blog says:

  • Having a time stop – scratch a trade that does not work for me after a given period of time
  • Being ultra-selective – trade only Radar/In-play stocks, which haven’t moved out of their ATRs, and still have rooms to go
  • Covering risks – initiate with 2 lots on higher R/R setups, and covering risks with 1 lot into the next up move / down move
  • Internalizing “second rat gets the cheese” – it is okay to miss the first 20c; you don’t have to be the 1st one in… let them do the battle, confirm the price action, and then I enter with more confidence

My Notes: Being selective in picking trades is probably the main cause of better trading – in choppy environments as this.

1 comment:

Nikhil said...

do you follow Point and Figure charts also? Did you try this type? what's your experience? with them?
Are not they less 'noisy' than normal bar/candlesticks charts?