I am new at this game to, so what I am about to write is my input. Psychology is 60% of trading. Know thyself. Skills is the other 40% of trading... keep learning Dont risk more than 1% of your pot in any one trade... risk management is essential. (This is a skill) Surround yourself with people in the game, and those that are good. Keep learning and learning, this never stops. Have a plan, have written out rules for trades, backtest these rules, develop faith in your rules (confidence), move forward and be positive, If you have a trade and it reaches a target before chopping it evaluate is there any more up or downside? Any benefit of letting the trade truck? Scale into the trade. If one trade on a trend has worked, fundamentally you have a free trade available. Is this this free trade worth taking on? Or do I take the money and run to the hills? I wish you the very best with your trading journey. Please get in touch if my limited experience can help. Crash101.
Good going! I also have a similar type of understanding from my experience, no matter how big the position is but psychology masters your mind in each trade.
I totally agree, no matter how good your strategy is, but if you don't have a strong trading mindset, even the best of strategies fail.
Risk Management Andras, You can place your entire account on a trade. 100%. Your account is likely to get terminated if it goes to 50% in debt. This method of trading is completely unsustainable because at the end of the day, the trade could go up or down. Do you want to risk your full funds if that was the case? The alternative strategy you have is to risk 1% of your account each trade. If you look for High probability trades, then the odds for you to pick the right direction is say increased from 50/50 to 70/30 in your favour. Looking at 10 trades talking in terms of the amount of capital you have risked if you risked 1% each time Your winning trades 7 wins and you gained 1% x 7 = 7% Your loosing trade 3 losses and you lost 1% x 3 = 3% Your net will be 7 -3 = 4%. This is a net gain. Ok.. good stuff. Neat isnt it. The task therefore is to identify the opportunities that you can put your capital to work where the odds are stacked in your favour and present this opportunity. Do not be worried about loosing. Its all part of the game. Hopefully this helps you understand where you have to get to. This is not some get rich quick strategy but will compound very nicely to a point that you can earn a very good living from it. Tricks are not to think of the money, I am not a trader but a risk manager and I am actually trading in fun bucks. Do you want more of these fun bucks? then you become a risk manager. This is what I do. My account went last week from negative -10% to a plus 5% meaning I made 15%. I then have lost 4%. I tried a couple of ideas and it didnt work. I had a good rationale for doing so but I dont have the experience to know yet what works and what doesnt exactly. But I have learnt something and my account is still in tact. My risk management is a journey and its every single small gain I can make 0.1%, everything will improve. Dont beat yourself up when you make a mistake, there is no point, just the next trade. You might think its easy, but its a mindset. "DO NOT QUIT"... keep striving to get better. I hope this makes sense. All my best Crash.
I massively disagree with this comment. If you have backtested your strategy and have determined that its works 80% of the time and suddenly it stops working, I will bet you this (I don't bet, I am a Christian and I don't gamble!), The fault of the strategy is not your strategy, its the human operator. Develop rules, and stick to them. If you do your job correctly and if you put your hand on your heart and say yes I have done so and you have lost 8 trades in a row, and only if you can say this, maybe there is a change in the market condition that does not work with your strategy. In forex, 20% of the time, trending, if you have a trending strategy, why would your strategy not work when applied to the right type of market condition, again its the operator. Are you trying to apply a strategy in a wrong market condition, are you for example applying a strategy against the flow of the trend?? A big no no. All of these facts come into play and its your job to back test a strategy, and keep on top of it. How can you fail? Only if you dont follow a good methodology and checklist!!! Crash101.