I would like to categorize traders into 3 different ways based on the way of trading:-
1. Based on Technical Analysis
2. Based on NEWS
3. Based on Astrology
I dont want to convert trading into gambling using speculation or news based or luck based trading. I have no clues of where to put Astrology based trading. So no views on 3rd category even. So we are left with the utmost important aspect of Trading called Technical Anlaysis.
If one sticks to TA(Technical Anlaysis) based trading no matter any news or insider trading happens or what-so-ever, you will be the winner and you will be the first in queue to take returns from market instead of doing chartiy to the market. But TA based trading needs to be followed strictly. It is not like one time you follow and the next minute you fall at the prey of emotions at the stock movements and suddenly you may lose your control on your basic principles of trading. And the story continues as usual that your day ends with nothing but beautiful chartiy to the market. Please do not blame the market. It is we who trade sometimes without any control on our own trading strategies what we have been following on and off. The problem lies with us not with the market. So, lets put a full stop to blaming the market and start trading with Passion, patience and persistence.
Trade with full passion and maintain good amount of patience. When I talk about patience it doesn’t mean that one should ignore stop-loss at the cost of patience. Absolutely not. Patience means wait for good entry and respect both stop-loss as well as target. This is the only way to cut losses and increase profits. I’ve seen many traders who enter after the move in the stock is about to finish. This is called wrong entry. When entry is wrong then the Stop-loss won’t work for that entry which happened in the wrong time. Once the stock starts to move against our targets then we tend to do wrong exit as well.
Now comes Persistence. There are some traders who follow TA for very short time and come to a conclusion that it will never work. But, let me tell you that every trading strategy works in the market provided you stick to it strictly. This is called persistence. Take the average results of some given period like a week or a month but not the immediate results in 5minutes. You get the impression that a strategy is not working in 5-mins interval and hence come to a conclusion that it will never work. So, try to have persistence in this.
Morethan trading strategies and TA, first of all one should adhere to the above basic 3P trading ethics. Then comes the chart-study, analysis or what-so-ever.
So, it is important to win the emotions in the market and then cut the losses and then finally comes taking profits. But many traders first target profits then try to cut losses and then they try to control emotions. So, don’t follow the statement in revese.
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