Trading the price action as it plays out has a better odds of putting a trader on the right side of the market than a trader with a bunch of opinions and predictions.
Backtested signals that worked in the past have better odds of success in the future than guessing which way the market will go.
A trader with a trading plan will usually beat a trader with no plan. A trading plan will usually guide a trader to make better decisions than the emotions of the people on the other side of your trade.
A trader who is patient with their winning trades will have bigger wins than traders who take profits to early.
Putting your stop loss in a spot that is unlikely to be triggered gives your trades time to work out without being prematurely stopped out during normal volatility.
Finding repeating patterns in the market and trading them over and over gives you and edge over the traders that do not know about the pattern.
Getting into a trade when the majority are getting out.
Getting out of a trade when the majority are getting in.
Trading a position size that keeps your emotions manageable.
Following a trend until the end when it bends.
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Things A Trader Needs to Give Up if They Want to Make Money:
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Give up your need to be right: The market is always right, donβt strive to be right in your predictions and opinions. Strive to go with the flow of the market.
Give up control: No matter how long you watch a live stock stream, you have no power over the movements. Save your emotional energy by not trying to cheer on your positions and get wrapped up in every price tick.
A stop loss is a risk management tool that keeps your losing trades small. The point of a stop loss is defensive and to eliminate big losses from your trading.Β
Here are ten tips for thinking about when placing a stop loss on a trade:
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Your stop loss should be a part of your trading plan on entry not figured out later.
The best time to set a stop loss is before you get emotionally wrapped up in the outcome of a losing trade.
Higher highs & higher lows define the market is in an uptrend. Lower highs and lower lows define the market is in a downtrend. Trading inside a defined price range a sideways market. Defining what type of market you are in helps you go in the direction of least resistance.
Where price is in relation to the moving average in its time frame can show the current trend.
Research historical chart patterns to understand what is possible in the market and how markets change from uptrends to downtrends, and from volatile to range bound. Use this insight to structure profitable trading systems using price action signals.
Backtest your trading signals to see if they had an edge in the past.