Preparing for Trading Success: Assessing Your Readiness

By | June 29, 2023 11:15 am
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June 2023 Expiry is coming to an end, Have a look at your ledger and see were you able to make profit for the series. If yes Well and Good If no ask yourself the following questions:


1. Do I treat my trading like a business? Have I prepared for it the way I would for a business?

2. Do I have a trading plan—a working document (not a mental note) to guide my trading business?

3. Do I make mistakes regularly (a mistake means not following my rules)?

4. Am I following any corrective procedure to prevent mistakes?

5. Do I have a back tested trading system?

6. Do I know how that system will perform in different kinds of markets?

7. Do I know what kind of market we are in now and know what to expect from my system in such a market?

8. Do I have exit points preplanned for every position I currently have in the market?

9. Have I developed specific objectives for my trading?

10. Do I accept responsibility for that creation?

11. Do I regularly work on myself to make sure that I follow the points above?

 

Write down all the responses that are true for you. If your score is below 7 of the 11, you are not taking your trading seriously. Your financial health is in danger.

You create your own results, and your results right now come  from playing a game with no training.

Tips for Successful Trading

Trading Methodology:

  1. Winning system-Only trade tested systems with a positive expectancy in the long term.
  2. Faith– Your system has to allow you to trade your beliefs about the market.
  3. Risk/Reward-Never trade unless your profit expectations are greater than your capital at risk.

Trader Psychology:

  1. Discipline-You have to keep trading your method even when it doesn’t work for a given time period.
  2. Ego-Admit when you are wrong.
  3. Emotions-Trade the math not your emotions.

Risk Management:

  1. Risk of Ruin-Never risk more than 1% of your total account capital on any one trade.
  2. Position Sizing-Use your capital at risk to understand the right amount to trade based on the securities volatility.
  3. Capital at risk:Never put more than 6% of your total capital at risk at any given time on all positions.
  4. Trailing stops-Always have an exit strategy to lock in your winners.

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