We know that because the markets are largely efficient, complete predictability will never be achieved. This makes trading more like punch in baseball, where it is possible to achieve a high degree of success, even making frequent mistakes.
Losing traders often try to measure the degree of perfection of their trade. They equate a good day with a profitable trading day. No! A good trading day – is one in which you have followed his well-calibrated trading plan with an appropriate concentration and discipline. Good trading days, after a certain time, will bring profits. But the uncertainty in the markets means that even the best trading plans can go awry. In the short term, you can not control your profitability. You can control whether or not you have a good trading days, which will bring profits in the long run – if you are properly investigated their strategies.
A more realistic trader understands that there is a degree of uncertainty in the market and that the losses are simply the cost of doing this kind of business. The goal is to limit these losses, as efficiently as possible, rather than attempting to eliminate their general and without being troubled by them.
In this article, I covered three main strategies, they can be rehearsed in advance to make a decision loss more automatic, ie, less emotional.
Risk management:
1. On the basis of the prices
I
use stop on the basis of price as a last resort in losing situations
where lights will not lead to the closure of the position. I see every
deal as a hypothesis. If I buy the euro at a one-minute interval, then
it is because I have identified the probable minimum point in this
market. Maybe I saw the currency pair was fixed near the psychological
level eg 1.200 or 1.300
I can place your stop order to buy. I put
forward the hypothesis that the pullback is the first upward movement.
If we go back to the previous minimum, my hypothesis was not confirmed,
and I have to limit their losses.
2. On the basis of the time
I
sometimes use trade the holding period of 30 minutes to capture 30
points. If desired profit has not been reached in 30 minutes, I have to
withdraw from the market, even if my stop on the basis of prices was not
achieved.
The logic of such a stop by the next time I try to enter
into short-term deal, when the momentum is increasing trade in my
direction. If I was successful, the position should become profitable
quickly. If the market is in a flat and slightly declining, when I
opened a long position, it means that I interpreted wrong impulse.
3. On the basis of the indicator
I
am using in their trade within and daytime version of market indicators
and volume. I spend a lot of time checking out these indicators on the
expected price action, that is, the relationship between the indicators
and between the indicators and the price, which is always changing. I
can note that the currency pair was fixed near the 200 moving average.
Most
of the research that goes into the development of such commercial
approaches, determines what happens when the lights that are candidates
to forecasters, the extremes.
If you take the time to explore inside and daily indicators in different time frames, you can create a stop on the basis of indicators that will fit your trading style and approach.
Conclusion:
As soon as the stop are determined, they can mentally rehearse, while trading continues, as a way to ensure that they are met.
Good scheduled loss, market failures are not planned.
I
always install limit losses in one transaction and one working day.
Outside I never go out, otherwise it may be emotional stress, and the
subsequent sale will be less profitable or even unprofitable.
Successful traders expect losses, bad traders cannot plan.
