Trading Style

Executing with Confidence: Why Write a Trading Checklist?

An important skill to learn is how to execute a trade with confidence with a trading checklist. One of the most common exercises of a retail day trader is to “pull the trigger” or entering a trade. You look at the days news, fundamentals and technicals and when you decide to open a position you simply call your broker or execute the trade online using your software or browser. Simple isn’t it? But have you has times when you got stuck between the decision making stage and the actual exercising your decision? Have you ever missed a trade because you hesitated, got cold feet or were simply indecisive at the time you needed to execute your planned trade?

Risk Free Trading

You must be dreaming! Trading is inherently full of risks. There is no such thing as risk free trading. Or is there? If you start paper trading, or using a trading simulator you are effectively trading without risk. If you decide to go down that route remember to keep a trading journal to record your feelings and decisions. Trading on paper is not the same as trading with money on the line - even if you risk relatively small amounts of money.

Trading Objectives: Setting Share Trading Goals

So, you've decided to part with some of your cash and invest it into trading stocks. Share trading is like a business. Your primary purpose is to make a profit. You're not a charity freely giving money back into the markets. Like any successful business formulating a business plan, successful traders also need to have a well thought out trading plan. Remember the traditional goal setting maxims: Goals should be SMART: Specific, Measureable, Attainable, Realistic, Timely.

Take Time to Relax From Trading

No one can go on trading at top speed all the time! Sometimes, you need to change gear and slightly push on the brake. Similarly, you cannot stare at the quote screen and focusing heavily on your trading all day. Take a breather and learn to relax. Learn to take time to relax from trading. You can learn to practice some yoga exercises that would prove to be beneficial to you. These would also help you to focus on your trading practices throughout the day. One of the most efficient techniques is take a long, deep breathe and hold it for 10 seconds.

Two Percent Risk Management

Good trading is not enough to succeed in the markets. The secret to successful trading is in great money management. The skill of money management is required because the real business of trading is making money with money through controlling risk. And an integral part of great money management is a great risk management strategy. The heart of that strategy is the magic 2 percent. So why two percent?

Random Walk From a Trader's Perspective

There is a book out there about "Random Walk Theory". I haven’t read anything about it but I would presume that the book would shoot down any prospect of a predictable market theorem.

Trading, Religion and Politics - Do They Have Anything in Common?

I've posted a new blog entry at Trading Critic. I look into the commonality between trading, religion and politics. Have a read of the preview:

Shares that are Volatile that Double and Half in the Short Term

If you aren't aware: there are stocks in the sharemarket that are very volatile and have their share prices double of halve in the short term.

There are stocks on the Australian Sharemarket that readily double or halve in value the short term. Better yet, there are traded financial instruments that are linked to the volatility of the larger valued stocks which also are highly volatile. The former are simply vanilla stocks. The latter example relates to derivatives, namely warrants and Exchange Traded Options (ETO's).

Quality versus Quantity Forex Trading

Yet another perspective on "risking a little or risking a lot": Quantity vs Quality trading...

Just a similar thought to last week's post with the forex trading case study discussing the issues of risking a little or risking the lot. Similar concept, just a different perspective or twist.

The Market Has Rhythm

Are you a fundamental or technical trader? Which ever one you use for your share trading, I'm sure you've felt that the market has some sort of rhythm to it. Just as we know the cheapest days to buy petrol (here in Sydney) are Monday and Tuesday, can the markets reveal some sort of pattern?

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