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The same type of trading applies whether you are long or short the
position. Especially if there is a strong trend in place. Make sure
you have researched the entry and exits of the trade. If the trade
seems more risky you can reduce the amount you are trading. If you are
trading stocks you can look for a cheaper stock because they often
trade in smaller time frames. Keep your stops close to the support and
resistance levels when making a riskier trade.
New traders need to learn this since they think it is nothing but easy
money to be made. Traders need to keep losses to a minimum and let
their winning trades run, using a trailing stop. New traders have a
common problem of fear and greed. Their are in desperate need to make
profitable trades all the time, so the new trader fails to understand
that it is a must to control losses all the time when in a trade and
make the most of things when the trade is in the money.
New traders will make a trade but fail to use a trailing stop when the
trade is moving in the right direction. They also panic and exit the
trade to early. The fear of loss is a big part of the new traders
decision process. They fail to take into consideration the time frame
and the different support and resistance levels.
Traders need to look and larger time frames to reduce the risk of loss.
In a smaller time frame you will have many more pivot areas to deal
with. Until you become a experience day trader you need to stick with
longer time frames in your trading of the stock and forex market.
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