Worry, Patience and Risk Taking
amount you worry about things will determine how you view a trade before you even take it on. It also determines how you will react if a trade begins to go against you.
you are a worrier you could also have real doubts about your strategy if you get three or four consecutive trades that don’t work out – you will not have the confidence to continue
and let the law of averages work over a longer period.
You could also be tempted to take a profit and run in case the trade turns against you instead of sticking to the
strategy that could make an even larger profit.
Patience is important in trading. Sometimes things just don't happen when you want them to.
Risk and reward are
inextricably linked. It is absolutely true that the more risk you take, the more POTENTIAL reward you might get - BUT:
*Only if the risk is one you can feel comfortable in
taking or you will override your strategy.
*There is no point in wiping yourself out with two or three trades that don’t work out.
The more risk you take, the more
worried you are likely to be and therefore the more you are tempted to make an emotional decision rather than stick to your strategy.
Trading decisions based on emotion
rather than a set of rules (strategy) will ALWAYS get you into trouble in the end.
Sometimes you will be lucky and your hunch will be right. Unfortunately, that will lead
you to make even more emotional decisions and at that point you might as well forget any strategy completely and trade on instinct and emotion.
******TRADING EMOTIONALLY IS
A RECIPE FOR DISASTER******
!!!!!! GREED AND FEAR ARE THE TRADERS WORST ENEMY!!!!!!!
There is a good saying in trading, which is, "Cut your losses quickly and let
your profits run." This oversimplifies a complex problem and the answer actually lies in using a sound strategy AND sticking rigidly to it. Being able to stick to the strategy is
where your personality comes in.
It is also said that traders who let losses run hoping they will turn round will go bust very quickly whereas traders who take profits early
will go bust slowly but BOTH will go bust.
The first rule of trading is to preserve capital - - without it you cannot trade!
The Strategy - The Next Step For You
The strategy I have developed and trade
every day is called the Short Swing Strategy and is designed to help people manage risk to any level that suits their own personality. It will allow you to determine the maximum
risk you are prepared to take on, even before you open the trade. This is due to an extremely precise but reliable way of using an initial stop loss and calculate your position
It will allow profitable trades to run without watching a large profit turn into a loss. This is because I use a simple but effective system of trailing stops. My
strategy shows you EXACTLY where to place them.
In short, it WORKS! It allows me to sleep at nights knowing that I make money in all market conditions. I haven't had a
losing month since I started trading the Short Swing Strategy.
I have published my complete strategy in a book called "Short Swing Trading" which is immediately
downloadable from my website: Click here for full details
Naturally I am not giving it away but you can always go to the web site and make up your own mind. I
feel sure you'll find it's worth every penny. Just one trade could cover the cost.
It is said that as people grow old they only regret the things they DIDN'T do.
They never regret the things they tried - even if it failed. This is one risk that's worth a try.
A good strategy will take the worry away and substitute excitement!
Be sure to read Part 2 of "What makes a really GOOD trading strategy"