Money and Equity Management
Margin and Initial Investment
* Invest only 5%-10% of your capital oneach trade.
* Leave enough buffer for price fluctuation or repair strategies
* Buffer capital sometimes needed for averaging your position
* Do not over trade
* Leveraging can be very high risk.Trade what you can afford. Be moderate
Rule of the thumb
* Maximum loss per trade rule : 2% of capital
* Different account size : Different trades
* 2% is the farthest location of your stoploss not the location of your stoploss!
* Trading is a "rollercoaster" not an amusement park.It is serious business.
* Don't Lose your shirt
Achievable Goals
* Plan a percentage modest achievable goals and gradually increase.
* Making 5% permonth continues to have a ROI of 60% per year
* Break it down to easy parts : eg.200 Pips per week
* Do not pressure on yourself or having an aggressive attitude don't work in trading. Trading is your job.
Managing your trades
* The most important thing in trading is not to have your losses run out of control.
* Losses could incur more drastic damage if not managed properly.If you may have a lot of capital as a buffer
and hold within the range of trade.
* Do not buy the same strike prices twice as your expose yourself to higher risk and when losses sets in. it doubles
* When you are on the side of the market,cut your losses and ride the trend!
Managing your trades
* Do not be greedy and do too many contracts.You have to manage them and can be very stressful
* Profits are realistic when you well plan your trade everytime.
* Do your homework on updates and current market trends.
* Jot down your bad trades and mistakes.A journal is very handy for future reference
* Do not try to recover your losses frantically after a loss, a trade can become emotional after a bad loss.
* Try to do trades on way .Do not have too many sell and buys at the same time . Take a step at a time.
Managing your trades
* It is not compulsory for a trader to trade everyday
* Do not be hasty and try to get in to market even when you see a signal.Go back to your system/Plan check
* Do your chart check to identify the trend
* Move to smaller time frames to check price range
* Decide if you may wnt to trade specific times frames Eg: 5 or 15 minutes
* Plan your trade with entry price,stoploss, and price targets.
* Be aware of flucuations/"Market noise"
Managing Your Trades
* Plan your trades
* Do not chase the market
* Trend always repeats and market is always there for the next opportunity
* Look at the big picture wlays and not just the smaller waves . Without the big waves, there are no small waves"
Managing your trades
* Take your profits when its on your platter
* Choose your time to trade.Be ware of volatility during market crossovers.
* When entering a trade, be defensive.'why are you taking the trade?
* Do not interfere with a running trade
* Do not predict the market .Rely on your skills.
Loss of momentum
* Destructive behavior,greedy
* Not following what you need to do .Follow your system
* Start to manipulate your trades.ESp,Stoploss
* Loss can cause frea and dobtfulness
* Do not trade when you are not in the mood
* Advice : Take a break and refresh your energy
Margin and Initial Investment
* Invest only 5%-10% of your capital oneach trade.
* Leave enough buffer for price fluctuation or repair strategies
* Buffer capital sometimes needed for averaging your position
* Do not over trade
* Leveraging can be very high risk.Trade what you can afford. Be moderate
Rule of the thumb
* Maximum loss per trade rule : 2% of capital
* Different account size : Different trades
* 2% is the farthest location of your stoploss not the location of your stoploss!
* Trading is a "rollercoaster" not an amusement park.It is serious business.
* Don't Lose your shirt
Achievable Goals
* Plan a percentage modest achievable goals and gradually increase.
* Making 5% permonth continues to have a ROI of 60% per year
* Break it down to easy parts : eg.200 Pips per week
* Do not pressure on yourself or having an aggressive attitude don't work in trading. Trading is your job.
Managing your trades
* The most important thing in trading is not to have your losses run out of control.
* Losses could incur more drastic damage if not managed properly.If you may have a lot of capital as a buffer
and hold within the range of trade.
* Do not buy the same strike prices twice as your expose yourself to higher risk and when losses sets in. it doubles
* When you are on the side of the market,cut your losses and ride the trend!
Managing your trades
* Do not be greedy and do too many contracts.You have to manage them and can be very stressful
* Profits are realistic when you well plan your trade everytime.
* Do your homework on updates and current market trends.
* Jot down your bad trades and mistakes.A journal is very handy for future reference
* Do not try to recover your losses frantically after a loss, a trade can become emotional after a bad loss.
* Try to do trades on way .Do not have too many sell and buys at the same time . Take a step at a time.
Managing your trades
* It is not compulsory for a trader to trade everyday
* Do not be hasty and try to get in to market even when you see a signal.Go back to your system/Plan check
* Do your chart check to identify the trend
* Move to smaller time frames to check price range
* Decide if you may wnt to trade specific times frames Eg: 5 or 15 minutes
* Plan your trade with entry price,stoploss, and price targets.
* Be aware of flucuations/"Market noise"
Managing Your Trades
* Plan your trades
* Do not chase the market
* Trend always repeats and market is always there for the next opportunity
* Look at the big picture wlays and not just the smaller waves . Without the big waves, there are no small waves"
Managing your trades
* Take your profits when its on your platter
* Choose your time to trade.Be ware of volatility during market crossovers.
* When entering a trade, be defensive.'why are you taking the trade?
* Do not interfere with a running trade
* Do not predict the market .Rely on your skills.
Loss of momentum
* Destructive behavior,greedy
* Not following what you need to do .Follow your system
* Start to manipulate your trades.ESp,Stoploss
* Loss can cause frea and dobtfulness
* Do not trade when you are not in the mood
* Advice : Take a break and refresh your energy
