“One can have no smaller or
greater mastery than mastery of oneself…” - Leonardo da Vinci
Fantasies
are among the cheapest things in the world, since everyone fantasizes.
Nevertheless, carrying out what you fantasize is sometimes not impossible,
providing that it borders on reality. So realistic goals in trading are the
objective plans that guide you as you journey towards financial freedom. When a
trader does not know what she/he is doing, nothing will work for them. The
message here is that you can achieve long term success with the most important
aspect of trading - risk management and rock-solid discipline. Without this you
cannot be a permanently victorious winner in the markets. Would you be amazed that we are serious about helping as
many traders as we can to be the best traders they can be as they continue
their journey to financial freedom? Trading principles that work are non-market
specific. Read on this article as you’re exposed to more timeless traits of
triumphant market wizards.
Traits of Successful Market Wizards
9. Victorious market wizards know that the markets will be there on
Monday morning: When I was still a novice, it wasn’t uncommon for me to be
dejected because I wasn’t online when a trading opportunity occurred. That was
ludicrous. Victorious traders acknowledge that they don’t need to be trading
every time. You might think that one trading setup is your last opportunity
that mustn’t be missed. This is plainly farcical. There’ll be many
opportunities to go long on the GBPUSD at 1.5600 or sell the EURGBP at 0.7900. You
oughtn’t to punch your PC or break your android phone when you discover that
you failed to notice a fabulous trading setup. You’ve to be grateful that your
portfolio is safe. There will always be trading opportunities in a foreseeable
future; even tomorrow. Be thankful if there’s no huge negativity on your
portfolio (usually sustained from emotional trades). More speculation
opportunities are coming your way. The markets will always be there on Monday
morning.
10. Victorious market wizards honor their
stop orders: When triumphant experts trade,
they use hard stop loss orders, not imaginary stops. The issue of stops is
controversial, and as a result of this, more articles would be written on this
very topic in future. Stop loss must be respected; it mustn’t be widened under
any circumstances. In the past, I declared without mincing words that trading
without stops is one of the suicide trading techniques that would eventually
lead to pecuniary ruin. Your stops are
your life insurance policy in the markets. I’ll have to be blunt here:
without judicious use of stop loss, it’s completely impossible to enjoy
everlasting success in the markets. Success without stop loss order would
eventually prove to be transient. It’s no wonder that some so-called market
professionals of the past are no longer trading (they crashed and flopped). Taking
one’s small loss and looking forward to the next trade is better than smarting
and running to toilet now and then because of a negative trade that’s going
protractedly against you. The probability that a negative trade would later go
positive is only 50%. One who fails to close a small loss could be later forced
to close a colossal loss. Great
institutions, funds, and investment groups have collapsed or morbidly affected
because their speculators failed to put and honor hard stops. Excessively huge
position sizing and lack of stops are often the reason why so-called [rogue] traders
ululate and wail like babies when the markets become precipitously irrational. A
stock that has gone against you by 500 points could just be starting a 6000-point
journey. The stock could even travel far farther than this and might not reach
your entry price during your generation. Victorious market wizards always use
stops, even if it sometimes appears daft to do so. They don’t also open
additional trades in the losing direction.
11. Victorious market wizards do not feel a
price is overbought or oversold: The price
on the GBPCHF isn’t oversold at 1.5082 if bears will still prefer to short
further at 1.5000. Market wizards do not buy because a market has fallen too
much, or sell because a market has risen too much. Majority of
speculators grapple forlornly with financial instruments as they’re looking for
turning points in the markets. No matter the observation period preferred,
majority of market speculators employ any chart analysis and analytical tools
at their disposal to pinpoint expected reversal areas in the markets. Rather than going against the market because they thinks
the price is too cheap or too expensive, victorious market wizards sell short
when there’s a rally in a context of a downtrend or go long when prices are on
sale in a context of an uptrend. Victorious market wizards wouldn’t look
for reversal areas. They’d prefer the reversals to occur; thus get confirmed
before they make their money somewhere in the middle of the new trend. They’d
make sure that the newly formed bias has been confirmed, contrary to most
speculators who look for reversals before they occur. Majority of speculators
dread trading with the flow in overbought and oversold markets. A market bias
is prone to hold its ground rather than capitulate, therefore is it sensible to
trade against the flow, rather than go with the flow of the markets? However,
this won’t prevent you from managing risk if there are eventual reversals.
12. Victorious market wizards increase their position sizing in winning
streaks and decrease their position sizing in losing streaks: For instance,
if I traded currency markets with a $100000 - account, I’d use 0.5 lots per
trade with 100-pip stops (with the assumption that I wouldn’t exceed 0.01 lots
for each $2000). If the account increased to $120000, I could increase the
position sizing to 0.6 lots (thus making it 0.8 lots if the account increased
to $160000 or 1.0 lots if it increased to $200000). Initially, if the account was decreased to
$90000, I’d reduce my position sizing to 0.45 lots or 0.4 lots if the account
was decreased to $80000. What certain gamblers have branded minuscule position
trading volumes has been part of my effective safety rules in the markets. A
female trader once reveals that, by risking 1% or less per trade, she finds it
easy to remain indifferent to an individual trade. Never increase position
sizing during a losing streak, with the hope of recovering your losses quickly.
You must always control the exposure of your portfolios, since you aren’t sure
whether the next trade would be a winner. You just need to stop doing what
doesn’t work for you and embrace the winning principles that have stood the
test of the time. The permanent safety of your account is far more important
than the returns you anticipate. Sometimes, it’s a few trades which are allowed
to run that’ll recover your truncated losses and add more value to your
portfolios - thus pushing you ahead. It might even be a few trades per annum.
Diligence and perseverance are needed in trading.
Conclusion: Part 4 of the articles in this series would be
available next week. Financial instruments
reward people with money as they put their portfolios at stake. In this regard,
putting portfolios at stake is what brings financial freedom. This is a staunch
principle of speculation and market activities. Are you a successful trader? If
you’re, please continue to enjoy the fruit of your effort. If you’re not,
solutions are available. The benefit of doggedness in trading shows that your
success is closer to you than you think. Even if your trading
performance is satisfactory, you can still do better than that. You’ve not
reached your fullest potential. Your present track record is never the most
astounding that can come from you. You’ve not attained the summit of your glory
in trading. There are tools and services that
can help you have the best trading experience available anywhere. For top-notch
experiences, you can subscribe free here: www.advfn.com
This article is ended with a quote from Dr. Janice Dorn:
“If you are not in constant attention to the small still
voice inside of you that keeps you centered and in the present, you will always feel the most fearful when you
should be the most greedy and vice versa. If you are watching every tick,
hanging on every piece of news and noise that comes to you through the media,
fibrillating on a minute to minute basis between fear and greed, in a state
that you cannot sleep or are in terror, or so elated that you know your
position will just keep going up and up, then you really need to get a grip and
get over yourself… You have the power to
be a consistently profitable trader if you get right with yourself, go with the
flow, stay centered and take total responsibility for your thoughts, beliefs
and actions.”
NB: You would be
exposed to world-class, cutting-edge, and top-notch trading experiences here: www.advfn.com
Azeez Mustapha
Market Analyst, Trading Signals Provider and Coach
Copyright (C) ADVFN PLC
For more articles, go to: http://www.advfn.com/newspaper/technical-analysis
NB: If you want
to receive permanently free winning Forex trading signals, please send me an
email titled: “A Request for Free Trading Signals.”
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