Posts

Showing posts with the label new-trading-books

THE NEW TRADING OF A LIVING- PRACTICAL DETAILS

Image
THE NEW TRADING OF A LIVING PRACTICAL DETAILS Will you be buying stocks that break out to new highs? Shorting double tops?  Buying pullbacks? Looking for trend reversals? Those approaches differ from  each other, and you can make or lose money with each of them. You need to select  a method that makes sense to you and feels emotionally comfortable. Choose what  appeals to you, what matches your abilities and temperament. There is no such thing  as generic trading, any more than there is a generic sport.  To find good trades, you need to define the pattern you want to trade.  Prior to  using any scan, you need to have a crystal-clear picture of what it should look for.  Develop your system, and test it with a series of small trades to make sure you have  the discipline to follow your signals.  You have to feel certain that you’ll trade the pat tern you’ve identified when you see it.  Different styles of trading call for different entry techniques, different methods of  s

THE NEW TRADING OF A LIVING- RISK MANAGEMENT

Image
THE NEW TRADING OF A LIVING RISK MANAGEMENT A good trading system delivers greater profits than losses over a period of time,  but even the most carefully designed system doesn’t guarantee success in every  trade. No system can assure you of never having a losing trade or even a series of  losing trades. A system is a plan, but as Helmuth von Moltke, a nineteenth-century German  field marshal, wrote: “No plan survives contact with the enemy.” The U.S. boxer  Mike Tyson, quoted by The Economist, put it more bluntly: “Everyone has a plan ’til  they get punched in the mouth.” This is why risk control must be an essential part of  every trading system.  The inability to manage losses is one of the worst pitfalls in trading.  Beginners  freeze like deer in the headlights when a deepening loss starts wiping out profits  of many good trades. It’s a general human tendency to take profits quickly but wait  for losing trades to come back to even. By the time the despairing