Quick reference for real trading profit. Tips that work

[dartmus]

You should mention what you trade because many trading instruments have tips or market tendencies only specific to that trading instrument and not to any other unless its a highly correlated market.

Simply, you don't want to make the mistake of trying to apply a trading tip from someone that trades something you don't trade and the trading tip isn't appropriate for your trading instrument.

Directional trading has v little in common with arb trading.

 

[schizo]

Chasing after runaway price will have your head on a silver platter.

 

[galvinlee888]

Don't use leverage, you are playing with random noise

 

[Bry]

Keep your risk low enough so that if you lose ten times in a row you will not be psychologically or financially wiped out.

(And if you do lose a few times in a row, make the risk lower and lower till the losing trend breaks.)

 

[DrEvil]

One of my favourites is:

"What everyone knows is not worth knowing"

 

[Visaria]

know when to cut your losses and how far to run your profits.

 

[maxxDovakin]

Excellent post.
I would take this even one step further.

The best trades are green very quickly.
We are best served to exit all losing trades quickly and wait for a better entry.

It's important to enter with the mindset that we may have to make 2 or 3 entries to get a good one. So we have to mentally prepare ourselves for many very small losses.

It costs enormous mental and emotional capital and opportunity cost to babysit losing positions that wears us down and we often make poor decisions because we so badly want the position to work.

Then when much better entries present themselves we completely miss them because we have been babysitting our bad entry and have spent our emotional capital.

This is an excellent explanation of why one should try to exit losing position as early as possible.

"It costs enormous mental and emotional capital and opportunity cost to babysit losing positions that wears us down and we often make poor decisions because we so badly want the position to work."

This alone is the reason enough to exit all losing position as fast as possible and fish elsewhere. Clinging on a losing position for more than necessary always brings negative emotions, makes one less firm and hence make more bad decision. Its better to exit and wait on the sideline than get hammered.

 

[Visaria]

“I’ve learned many things from [George Soros] but perhaps the most significant is that it’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.”

- Stan Druckenmiller