It is important to keep your emotions in check when trading. The market
doesn't care about your position size. A fifty pip move on a mini lot
in the EUR/USD is only $50. But a fifty pip move on five standard lots
is $2500. Does the market care about your position size of 5
standards. It does not care and will take your money every time you
let your emotions take over. Traders need to set stops and profit
targets this will take a major part of the emotions out of your
trading. The main difference is how the larger position size
affects YOU. This is why adding to position size slowly allows you to
not be emotionally affected by the massive changes in the profit and
loss column from trading larger sizes. The novas’ trader can do things
that would have seemed unimaginable just a few short weeks ago. When
trading online it is important to understand how trades work. All of
these things will help your confidence and move you up the learning
curve to where trading multiple trades, becomes easy.
When traders are using moving averages, they acknowledge that
it is an average of price and that price will move away from that
average and revert back during a trend. The average should be much
like the support and resistance areas. You want an average that is
half the length of the cycle so that it will show the peaks and
troughs as movements from and to the average itself.
You can trade on the news and conventional trend analysis and
sell near the low and buy near the high. Traders can focus on the
reality of how you make money buying and selling at the correct areas
of the market. Remember demand "wholesale" and supply "retail," Then
you would start to think wisely because we all want to buy at
wholesale prices and sell at retail prices or the highs and lows of
the trend.
All traders need to increase their ability to read charts.
Stock,forex,futures charts are pretty easy to read once you take the
time to learn. Set your charts to be easy to read with just a couple
indicators. If the price isn't at a good level of supply or demand,
you must wait. In an uptrend, you will see prices move away from the
average only to snap back to them when the channel of the cycle
returns. The same is true when changing to a downtrend, then the
average would be violated and the price would bounce off of it to the
downside before returning during peaks in the cycle. If the average is
weak in both directions, then we do not have a strong trend in that
time frame on the chart.
Our Trade Log will include what the entry was based upon and
as well, the minimum of target, with your stop and selling areas.
After the trade, this information would be compared to your micro
trade plan to discover the what went right and what went wrong. If the
micro trade plan was not followed or if you violated your rules, you
would then write that in your Thought Journal to identify what went
wrong in your thinking, emotions and follow-through. With time and
trading, you will begin to identify faulty patterns of both your
trading strategy. Your mechanical data and the faulty patterns of
your thoughts and emotions your internal data. When you have
identified the problems, this is when you will become a profitable
trader.
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