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Written by Leroy Rushing
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Professional traders know all about the guts and glory of live trading. Trading discipline is the only difference between unprofitable and profitable traders. Watching a violent swing in the charts that can put a dent in your trading capital can be tough to swallow.
Avoid the Cringe of the News
To preserve your trading capital and avoid a heart attack, it is best to stay away from news related market activity. Even proven strategies are proven to fail when there is a large amount of volatility and gut instinct present in the market. After data releases, such as the Nonfarm payroll or inflation statistics, the markets will go wild with volatility.
Plan to Avoid the News
A trading plan planner should always be kept to outline under what conditions your strategy works best, but also to include times when the strategy is not as profitable. Key news dates should be written down in an easy to see area of your workstation. Markets like to respond to news 15 minutes before the actual news release and continue for hours after the news breaks. Avoiding high volume news times is the best way to preserve your trading capital and keep the cringe-inducing trades to a minimum.
Preservation Equal to Growth
To master day trading is to know when not to take a trade. Preserving your capital is equally as important as growing your portfolio. If the market loses 30% one year and a profitable trader preserves his capital, he’s outpaced the market by 30%. While wealth was not created, he made an effective gain of 30% after comparing to other investors. In a downtrend, trading discipline is critical to keeping your head and your profits.
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Written by Leroy Rushing
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Being a trader is more than just a day job. Traders will often find themselves studying the numbers on unrelated events. After taking the plunge into the world of technical investing, you might find yourself looking for trends and chart patterns on things as simple as a weather chart.
Seeing Charts Everywhere
The professional trader will rarely leave work at work. Trading success with technical analysis will bring a trader to actively discuss key issues after hours, such as late day breakouts or momentum strategies. The markets are a bit of an obsession for the average day trader.
Traders who use technical analysis have the hardest time getting away from work. Everywhere you look there are patterns, specifically chart patterns. After years of looking for patterns on stock prices, it is hard to ignore the patterns in everyday life. Finding established chart patterns in a sea of data is easy for a professional trader. It is very likely that traders become obsessed with numbers and chart patterns.
24/7 Trading Makes Stepping Away Difficult
Because trading is such an up and down event, stepping away from the trading desk can be difficult. With the world markets open anywhere, anytime, 24/7, it is hard to ignore the computer screen in favor of a relaxing event. Even financial freedom is not enough for some traders to ignore the markets; buying and selling can be a lifestyle rather than a simple way to make money.
After years of successful trading, life-changing results, such as a ten-bagger in a retirement portfolio, is usually not enough to get away from the markets. Look at any of the most successful professional traders – even though they have financial prosperity, they are still on a quest for more. Financial freedom is just a status rather than a gateway to retirement.
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