Trading Mistakes

3 Trading Mistakes You Cannot Afford to Make

These 3 trading mistakes will most certainly lead to disaster. More can be read about these mistakes here. Impulse Trades – The impulse trade is usually a much liked trade. It makes you feel like you actually know what you are doing, like you have some sort of control over the markets. Sadly, they always end in disaster. Go back and look for yourself. Evaluate your trades by how well you followed your setups. Here is a post on how…

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How to Evaluate Your Trades

One great way to track your trade performance and determine which setups are working and which are not is to evaluate your trades at the end of each day and week. This is the breakdown I use and is derived from John Carter’s book Mastering the Trade. 5 – Target reached 4 – Out for win (due to technical factor that signaled me to exit) 3 – Break even 2 – 1 target hit 0 – Full stop out I…

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When NOT to Trade

Waiting patiently on the sidelines is one thing you hear some of the world’s greatest trader’s talk about in the book Stock Market Wizards. These are the times I’ve found best NOT to trade. When breadth is at parody, 1:1 When the a/d line is at parody, inside |400| When the tick is at parody, inside |400|

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Days to Avoid Gap Plays

Avoid gap plays on the following days. 1.       Options expiry Fridays. It’s OK to play gap up situation. 2.       Rollover Thursday and the day after. 3.       First trading day of the new month. 4.       Day after Fed day. 5.       If after a narrow range day, the next day’s gap is larger than the previous day’s range. 6.       Gaps where the opening prices are outside the previous day’s session high or low.

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Revenge Trading, Why Trying to Get Even is a Mistake

For newer traders and veterans alike, revenge trading can become a big problem and lead to over trading. When a trade goes against you we sometimes feel the need to get back to even, or make it back on the next trade in the market that took it from us in the first place. This in turn leads to more losses. The most important thing about trading is knowing when to stop. Having a rule, or line in the sand…

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