Small and quick losses are the best losses | Forum

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pvcboard Jul 25 '18

 What sets many of the worlds great traders apart from the crowd is their ability to have a single-minded approach to making money which at its most basic means being disciplined. It might be, it might not be, but if you are following a disciplined strategy the whole point is to take every signal. Likewise, it is suicidal to use oscillators in trending markets not only do they give poor signals, but you may miss the main thrust of a brand new move.

  If you can master these simple rules, you are already far ahead of the majority of traders. If you are using margin, which is normally the case for CFD trading, you want results.

  If in doubt, find the strongest stocks in the market by measuring the slope of their performance or how they are faring against the benchmark index.This article focuses on the discipline involved in using a technical approach to trading the stockmarket, but the rules shown below could easily be modified and in some cases equally applied to any approach and any type of trading.

  The search for the frustrating holy grail

  Many technical traders are constantly searching for the holy grail of systems, and there are clearly some approaches that work better than others, though very few approaches work all the time in all markets. Try and keep it simple and stick to a strategy that you feel comfortable with. By the law of averages, and given that this is essentially a zero sum game, you have every opportunity to make steady profits and of course enjoy trading its not supposed to be a stressful business, but humans have a tendency to make it one. Taking small profits is the surest way to ultimate loss, as these are never allowed to develop into enormous profits. One might start with three basic rules of trading: going with the trend, limiting risk by using stops, and careful money management.

  Dont use a trend based approach when a share or index is in a trading range (which for many stocks is the majority of the time. Dont be disheartened if your favourite trade doesnt do what you hoped there are plenty more every day to choose from.

  Small and quick losses are the best losses, however annoying they may be. Those that issue profit warnings are usually already in tilting pad thrust bearing a downtrend. Many of the best trading systems have around a 40% success rate of winners, but the winners tend to achieve much higher returns than the losing trades. What is more they are able to adapt to different background conditions, and for CFD traders this aspect is crucial