Day Trading Success- The Key Is Survival
Most new traders tend to focus just about all their time and
energy on finding nearly perfect "setups", but trade setups, even
very good ones, are *not* the key to successful trading. It's the
*way* you trade your setups that keeps your losses smaller than
your gains. And this is the single most essential key to trading
success. To me, the process of limiting losses is more than just
money management...it is survival.
I can't give you a list of mechanical survival rules that will
take the place of experience and make you a successful trader
overnight, but if you stick to the following principles in your
trading, you'll be on track. You'll be doing just about the
opposite of the crowd, and you'll eventually learn to limit your
losses. Limiting your losses is the only way I know to make money
in this business.
The following guidelines will sound radical, but they have
guided me in making my living from trading for many years.
1. If a trade doesn't go your way within the first one
to five minutes, get out. I usually get out within one or two
minutes as soon as my perceived edge is gone.
2. If a trade goes against you in the first few
seconds, begin drawing in your hard stop and/ or your target,
trying to get out of the trade at break even.
3. Never let your hard stops get hit. When it happens,
you may want to take a break and get some fresh air.
4. Hard stops are adjusted to market conditions. At the
moment (July 6,2005) I am using 1.50 point hard stops on the SP
5. Never move your hard stop away from your entry
point, hoping that a bad trade will turn around.
6. If you find yourself *hoping* as you trade, it is a
clear sign that you are not following good survival (money
It will be impossible to put these principles together without
a set of high-probability setups. Without good setups, trading is
just a flip of the coin.
Mike Reed is author of TradeStalker's RBI Trader's Updates. He
has been trading the Market for 23 years. When he got his start
as a trader, Mike was plotting prices on paper tape as the
internet had not yet been "born" as we know it today. Years of
experience have really given him a feel for the Market action.
His support and resistance numbers have been published on the
internet since 1996. He has a wide readership that includes day
traders, floor traders, locals and hedge fund managers. Mike's
nightly support and resistance zones are specific and incredibly
accurate. He offers an unlimited free trial of his nightly
TradeStalker RBI Trader's Updates. http://www.TradeStalker.com
MORE RESOURCES updated Thu. December / 05 / 2019
The Miracle of
My father, who owns a small parts store and garage for
vintage British sports cars, called me up recently and
droned on and on about how he is getting killed by the
Euro. Confused as to how the Euro could possibly be
affecting his small and seemingly insignificant business, I
asked him how.
How Do Other Countries
Devalue Their Currencies?
Countries devalue their currencies only when they have no
other way to correct past economic mistakes - whether their
own or mistakes committed by their predecessors. The ills of
a devaluation are still at least equal to its advantages.
Example of a Profitable
Transaction in FOREX
To make a profit, in the FOREX, a trader can enter the
market as a *buy position* (known as going "long") or a
*sell position*(known as going "short"). For discussion,
let's assume you've been studying the EURO.
Hedging Foreign Exchange
The exchange rate of the Macedonian Denar against the major
hard currencies of the world has remained stable in the
last few years. Because of the IMF restrictions, the local
Narodna (Central) Bank does not print money and there are
no physical Denars in the economy and in the local banks.
Long term traders will work from end of day data
and look to hold trades for a few weeks up to many months.
Usually trend trading.
There are many types of investment methodology out there.
All of them has their own merits.
Trading Profitably on
the Foreign Exchange Market
You may be asking yourself "how does one begin to trade
profitably as a currency trader?". First, it is important to
closely monitor foreign equity markets to attempt to
predict or model how their respective currencies will
perform against other currencies, ideally, currencies that
are not very closely related, nor proportional, to the
Forex Trading -
Advantages and Disadvantages
What is Forex Trading? Forex, or Foreign Exchange, is the
simultaneous exchange of one country's currency for that of
another. This market of exchange has more daily volume,
both buyers and sellers, than any other in the world.
How To Control Fear And
Greed In Trading
There is an old saying that the market is driven by fear
and greed. Anyone that has placed more than a couple of
trades will surely have experienced these two emotions.
Stock Market Report: Day
Trading or Swing Trading Online? Stock Investing
Profitable day traders recognize that momentum trading is
among the fastest & most effective ways to harvest BIG
piles of cash in the stock market.The problem is that if
you don't know what stocks to look for and how to approach
them while limiting your risk, you won't even get close to
making some profits.
Forex Trading Online - 7
Reasons Why You Should!
Forex trading online is a fast way to use your investment
capital to it's fullest. The Forex markets offer distinct
advantages to the small and large traders alike, making
Forex currency trading in many ways preferable to other
markets such as stocks, options or traditional futures.
6 Critical Factors For
Success in any profession can be broken down into a number
of critical factors. Trading is no different.
The Secrets of the
The first and perhaps most important "secret" is to realize
that your methodology or approach (no matter how good) is
only part of being a highly successful trader. This applies
to any trading style including, day trading, swing trading
or position trading.
Adaptation to the
Realities of the Market
Do you think adaptation to the realities of the market is
the most important thing?Many times in the past I've
written about the need to adapt, the need to be able to
change your behavior relative to the market because the
markets are ever changing. I've stated that mechanical
systems may be workable, but for only a short time relative
to the life of markets.
Forex Options Market
The forex options market started as an over-the-counter
(OTC) financial vehicle for large banks, financial
institutions and large international corporations to hedge
against foreign currency exposure. Like the forex spot
market, the forex options market is considered an
Exploring the World of
Are you looking into a career in day trading? In the past,
the tools for day trading were available only to
professionals. But thanks to the power of the Internet,
everything you need to get started is now conveniently
Internet and Computer
Systems in the FOREX Business
With every passing year the interest in electronic trading
is bigger, more especially trading shares and currency
through Internet. A new profession came forward - this of
the currency dealer.
Trading Tips No 1: Learn
How to Trade The Moment of Truth
So you have learned how to trade the markets by mastering a
few trading tools like Moving Averages, Channels,
Stochastics, MACD, or RSI - that is a great accomplishment
achieved by only a few. However, having the tools and rules
to trade markets successfully, year in and year out, is
only half of the challenge.
Choosing A Forex
With currency trading becoming ever more popular, the
number of brokers is growing at a rapid rate. What should
one look at when deciding which broker to open an account
with? These are the important points to consider.
What are Your Options
Regarding Forex Options Brokers?
Forex option brokers can generally be divided into two
separate categories: forex brokers who offer online forex
option trading platforms and forex brokers who only broker
forex option trading via telephone trades placed through a
dealing/brokerage desk. A few forex option brokers offer
both online forex option trading as well a
dealing/brokerage desk for investors who prefer to place
orders through a live forex option broker.
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