Hi Guys, I would like to provide you with a few tips to improve your trading. Please keep in mind of course all of my tips are for educational purposes only and just because they may have worked for me does not mean that they will work for you. The tips apply to all kinds of trading or in fact any activity where money and chance is involved.
So here are a few tips in order of importance.
1. MANAGE YOUR RISK
There is really no other rule when it comes to trading that is more important. If you loose too large of a portion of your account you will never be able to bounce back and make more trades. You never want to risk more than 2-5% of your account on any single trade. And if you are dollar cost averaging down it does not count as a separate trade count your aggregate loss if you get stopped out don't look at each scale in as a separate trade.
2. Trade small relative to your account size to keep emotions out of it.
The less money you have in play the less your emotions are involved and it is critical to keep your emotions at a minimum. So until you are highly confident in your strategy keep your maximum single trade loss less than 2% of your account balance.
3. Create a trading plan
Before you make a single trade have your strategy completely defined and have a contingency for everything. You need to have your strategy outlined, when are you buying, when are you taking a loss, when are you scaling in, when are you taking profit, how will you handle a draw down, how many negative trades will you handle before you reevaluate the strategy. This is just the tip of the iceberg in terms of the questions that need to be defined. And unless you can define them in writing in front of you in an easy to use document when you trade do not trade.
4. Trade with a partner to minimize emotions
Stephen Cohen, one of the greatest hedge fund managers in the world has all his traders trade in teams. If you can find a partner to trade together with this way your emotions will be balanced out and you will keep each other on task.
5. Keep everything as simple as you can
When making a trading plan always think to yourself, will I be able to execute it. If your strategy is to complicated and involves thousands of indicators, don't even plan it out. Trading is mainly about managing your risk and controlling your emotions if you can not do it on something simple how can you do it on something complex. This does not mean however that you can not have an automated system with multiple filters.
6. Get every edge you can
For example receiving rebates through your introducing broker is will make your system more successful by minimizing your transaction costs. Make sure your broker meets your requirements also. The key here is to preserve your capital. For example if you are paying $500 a month for a signal service and your are only making $100 on your trading you are at a net loss of $400. Preserve your capital.
I hope these help. These are just a few of the tips that are important for me. Initially I was all about looking at indicators and chart patterns and signals. It took me about 4 years into my trading to realize that trading is nothing more than managing risk and your emotions. If you like these tips and want some more interesting stuff we have some more writings available and are actually coming out with a new content rich website pretty soon I will keep you guys posted.
( source : email course traderchois [dot] com )
