Tuesday, March 10, 2009

Certain Aspects of Trading Which Will Change Your Trading Forever

A trader with a plan is like a hunter with a fully bent crossbow. In order to reap the reward, you must release the trigger and have the courage to assume risk. All the study and training is academic without actual execution of your trading plan. Recognize that your decision making process may be different when you are involved in the trade. Execute your plan and be rewarded for being correct, but be prepared to retreat when you are wrong. You must be a risk taker, but wanting to limit risk too much often leads to mediocre trading results.

Trading is a game of longevity. You are always learning and searching for perfection. In addition, you are always aware that at any time you have an open trade position, you are at some level of risk. A Direct Electronic Trader can only measure their success after the last trade has been closed. One must realize that an active trader is constantly at risk and, in this business, it is only the bottom line that matters. A trader is in constant search for the "perfect trade." Ultimately, the trader who is best at protecting their capital wins in the business of Direct Electronic Trading.

Trading is a way of life.
It is a constant search to find the meaning of "how" and "why" people behave in certain ways and how that mass behavior will move a stock's price up or down. It is also about a trader being constantly aware of the risks involved in their actions, while striving to constantly improve their trading strategy and skills and controlling their emotions.
Many traders discover themselves in this profession. A trader's natural instinct displays itself in trading. With patience, discipline, hard work, determination, and a willingness to assume risk, the successful trader discovers that same trading rules that applied centuries ago still apply today, and probably will continue to be true in the future.

The Successful Trader will
Watch a stock's price movement. Diligently study why it moved in order to develop a trading plan. When the pattern repeats, the trader will recognize it, and will cautiously execute the appropriate trading plan.
If the pattern fails, the trader will recognize its failure, and quickly exit the trade.
The trader will study why the trade failed, and develop a better plan.
A successful trader will repeat this process in a never ending search for the "Perfect Trade".


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