The secret to Successful Trades
Do you recollect initiating a trade and being pretty confident about it, and you begin to salivate as the stock begins to move in the direction you desired, but then some news breaks open and it all comes down, not just the stock but also all the profit you aspired.
Now imagine, how would your trading account look like if you hadn’t taken all those trades you knew you shouldn’t be in in the first place?
Just think about all those trades where you entered too early, broke your rules, chased trades, took too much risk, exited too early, were too greedy and gave back profits, or did not close a losing position and ended up taking a much greater hit.
Traders are often much closer at finding their market edge and trading profitably than they think.
Most of the time, it’s not the lack of required skill set but Trader’s inability of developing and sticking to a disciplined approach.
Lack of a disciplined approach in itself is a “Red Flag”; ignorance of which causes one to make impulsive trading decisions, violating Risk Management rules, revenge trading, over-trading, and all of these inevitably cause capital erosion, making trader take a larger hit than what he had anticipated.
So how do we fix this deviation?
By inculcating a disciplined approach to every trade, you enter.
Here are some recommendations made by the veterans of D-street:
We will say it one more time; Imagine how your trading equity would look like if you would have avoided all the trades where you violated one of the principles.
Pacifying oneself as “Oh! I’m not a trader but a Long-Distance Runner” when trades start going south and waiting patiently during the downside but hurrying in the rally are as good as open invites to capital erosion.
The basic premise of Dow theory suggests that the Market discounts everything and that is reflected in the prices of stocks and indexes.
The only way to be a winner consistently amidst this ever-changing market trends is to be persistent and consistent with a disciplined trading approach.
All it needs is will power and make no exceptions to the principles you make for yourself.
Having Trading Discipline is the beginning,
Keeping discipline is the progress,
And Staying disciplined is Success.