Archive for the ‘General’ category

Shortened week

December 23rd, 2008

A general though is, that it is almost impossible to trade during the Holidays.

At the same time the most important thing we learned in 2008 is that every rule has its exceptions. The same thing is with trading during shortened week.

For most traders it is a problematic environment to trade because of the lack of volatility, as most market participants are taking this week off to spend more time with the family, relatives, etc.

The same thing happened this year, still the markets were quite tradable. Especially for those, who were patient enough to wait for a setup and had a game plan in mind. Here is a chart with possible setups:

You just needed to follow the trend.

As the saying goes: Don’t hate the Game, hate the Player.

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Posted in Education, General

Tags: holiday trading shortened week trading in december

Just a though…

December 18th, 2008

Here is a good quotation for the day:

Money lost in the chop are the same color as money lost in the trend.

One of my main problems was to be unable to “stay the course”. Even when I had a strong conviction in market direction, I usually haven’t made any money at all or made too little, regarding the overall move.

Most of the times I exited too early was because of being afraid, that the price might reverse against me and my tiny profit might become a loss.

After exiting position without any good reasoning, I was just watching it reversing again and now going in my favor….the only difference was that I was so stoned, I couldn’t place any more trades and was just watching at the price going more and more in “my” favor.

After doing some thinking I have made a set of rules, how to deal with this problem:

Don’t over leverage.
Stay calm during the trade.
Never revenge trade (I know it’s a tough one)
Never overtade (this one might be even tougher)
Always have a plan what are you going to do after placing the trade (doesn’t matter whether it goes in your favor or not – this helps you to follow Rule 2).
Be patient – don’t chase the price, watch carefully till the price gets to your entry point (There will always be another opportunity).
Exit the trade only for two reasons – your target has been hit or the reason why you entered the trade is not there anymore (You may also ask yourself, if you opened this position under the new conditions).

For me, the most important aspect is being patient. You can’t really make money by “winning some, losing some” it just doesn’t work! Usually it goes like this: “winning some, losing a lot”. So, for me, the only profitable way to trade, was to place small number of trades with the clear idea of how I am going to manage it. Also my planning work helps me to stay out of the market, so I can’t do any stupid mistakes.

If you are struggling with same issues, try to define your own set of rules that would work for you. Stick it near your monitor and review daily. It will safe you a lot of nerves and money