Trading Guidelines

S

sumeet666

Here are some of my trading guidelines, they help me in being disciplined and being patient

1) Don't trade when the mind is not calm and composed, market is not going anywhere, take a break

2) Don't open/close position in panic....wait for a while for a more favorable exit.

3) Don't count unrealized profits as money in the bank.

4) When you see sudden big gains, don't be in a hurry to book the profits. Use the profits as a cushion to let the position ride.

5) After a loss, wait for a while before taking another bet.

6) Do NOT try to catch the bottom or top, there is no such thing as - price has fallen/risen a lot now it should reverse. If you miss the move wait rather than trying to fade the move.
 
Quote from sumeet666:

Here are some of my trading guidelines, they help me in being disciplined and being patient

1) Don't trade when the mind is not calm and composed, market is not going anywhere, take a break

2) Don't open/close position in panic....wait for a while for a more favorable exit.

3) Don't count unrealized profits as money in the bank.

4) When you see sudden big gains, don't be in a hurry to book the profits. Use the profits as a cushion to let the position ride.

5) After a loss, wait for a while before taking another bet.

6) Do NOT try to catch the bottom or top, there is no such thing as - price has fallen/risen a lot now it should reverse. If you miss the move wait rather than trying to fade the move.
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Ok...so now you're more disciplined and patient.

However, you more profitable ???

Last of all, I don't like rule #5 because if you get another trade signal (not gut feel trade) via your trading plan...why ignore it ???

Mark
 
Quote from wrbtrader:

Last of all, I don't like rule #5 because if you get another trade signal (not gut feel trade) via your trading plan...why ignore it ???
More...

If you are a discretionary trader, taking a few mins. off after a losing trade helps you being centered. You can then take the next trade which is independent of the outcome of the previous trade
 
Quote from jack hershey:

Your past decisions have caused irreversable damage.

This occurs for the vast majority of potential traders.

We empathize.
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you can take your empathy and shove it where the sun don't shine :p
 
I agree with Mark here. There are times where the stop loss that takes you out of a trade at a loss should be doubled to take into a trade in the other direction. Not always, but sometimes, and that new position pays for the loss many times over. This most commonly occurs when a trend reversal signal occurs.
 
OP,

I place an inordinately large glove upon my left hand

I pick up a sphere the approximate size of an orange

My friend is standing approximately 60’ 6” away from me with a similar type of glove on his hand

I focus in on the center of his chest

I grasp the sphere so the stitching allows me grip, and align my index finger along one run of stitches

While holding my focus upon my friend's chest, I bring back my right arm and hand behind my ear

In conjunction I raise my left leg and foot

I thrust the sphere forward from the power generated throughout my body


Just before releasing the sphere, I release my wrist for added thrust


The ball flies across the span and into my friend’s gloved hand

===============================================================================================

Stated another way – I’m playing catch with my friend

=============================================================================================


The human mind in only capable of focusing on one thing at a time (although at times is seems we can focus/ are focusing on multiple thoughts – we can’t)


Think of an orange…. And an elephant simultaneously - can't do it....

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You are doing a great job here, and on your other thread,

http://www.elitetrader.com/vb/showthread.php?s=&threadid=213054


of identifying the stuff each of us need to assimilate/ fix/ resolve/ come to terms with/ monitor/ or just plain get over – so we can simply trade profitably…

=============================================================================================

Trading (like throwing a ball) needs to become a series of steps – repeated over, and over, and over, and over – without the need of actively thinking about it/ them – till the day we stop trading


But to get to the point where trading is as natural as throwing a ball – obviously requires considerable work


This is also where, and why, the notion of only being able to focus on one thing at a time comes in to play


Ultimately you will need to focus on price…, and the process of trading…, and very little else…


=============================================================================================


Appears you are in the initial stages of identify all the stuff – which is great…

The next step will be assimilating it so it’s second nature – (you do it without needing to consciously think about it…, or you’ve resolved it so it never comes up)


Then price is the only thing that has your focus – and you’re simply following the process of trading it.., while also making real-time adjustments (to your entries/ exits)

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Btw – I disagree with 2 – and here’s why….

If I’m in a trade, and the reason I based my entry on has been proven wrong – I will get the hell out of that trade by any means necessary…, just as quickly as I can...

Besides I can always re-enter (a fact that will become apparent to you in due time)


Also as you mature as a trader – you’ll find number 5 becoming obsolete – Now it’s a great rule to hold onto… but like I say as you grow – don’t be surprised you out grow it – no harm there (see above sentence)

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Another thought….


Ever heard the saying – Practice like you play…..

The Military…, Swat…, Pilots…, Snipers…, Professional Athletes – just to name a very few – all practice exactly like they play…

So when it comes time to perform it’s second nature – they’re simply following the process already drilled into them so there is no thought – except the adjustments dictated real-time by the situation at hand….


Get set up on a sim – and practice exactly like you plan to play….


I promise you this….

It’ll treat you (sim trading)…, once you go live…, exactly how you’ve treated it while getting up to speed and learning to trade (aka; drilling the process into you)…

============================================================================================

Let me know if any of this strikes a chord or makes sense…. Or I've missed it totally....


And if you have more questions – just ask…..


RN
 
Quote from sumeet666:

Here are some of my trading guidelines, they help me in being disciplined and being patient

1) Don't trade when the mind is not calm and composed, market is not going anywhere, take a break

2) Don't open/close position in panic....wait for a while for a more favorable exit.

3) Don't count unrealized profits as money in the bank.

4) When you see sudden big gains, don't be in a hurry to book the profits. Use the profits as a cushion to let the position ride.

5) After a loss, wait for a while before taking another bet.

6) Do NOT try to catch the bottom or top, there is no such thing as - price has fallen/risen a lot now it should reverse. If you miss the move wait rather than trying to fade the move.
More...

1. It doesn't matter if im calm and composed because I have something called rules.

2. No panic, just rules.

3. Doesn't matter if you count it. I can count blades of grass in my yard as long as I follow my strategy.

4. I am in no hurry because I have a plan and it doesn't care whether I am up or down unless it hits my stop.

5. After a loss, search for more opportunities that are legitimate.

6. If you have a bottom/top strategy that works by all means continue using it.
 
Quote from sumeet666:

Here are some of my trading guidelines, they help me in being disciplined and being patient
1) Don't trade when the mind is not calm and composed, market is not going anywhere, take a break
2) Don't open/close position in panic....wait for a while for a more favorable exit.
3) Don't count unrealized profits as money in the bank.
4) When you see sudden big gains, don't be in a hurry to book the profits. Use the profits as a cushion to let the position ride.
5) After a loss, wait for a while before taking another bet.
6) Do NOT try to catch the bottom or top, there is no such thing as - price has fallen/risen a lot now it should reverse. If you miss the move wait rather than trying to fade the move.
More...

sumeet666
You have some interesting guidelines, a lot of don't-s. I suggest you rephrase them into do-s and start giving yourself credit for what you're doing right. :)

example:
1) I trade when my mind is calm and composed, if the market is not going anywhere, I take a break

RN took issue with #2 and I agree with his reasoning, waiting can be VERY expensive.

I'll expound on #3 ... 3) Don't count unrealized profits as money in the bank What do you count it as, it is indeed real money .... just like the folded bills in your pocket. All you have to do is click your mouse and it's yours. I have no idea of your trading style, scalper, swing or position but the name of this game (trading) is to make money, there's no other reason to be involved. When do you start thinking of "unrealized profits as money in the bank"? I'll bet if you had a $500 lead on a day trade and you watched 20, 30 or 40% of that unrealized profit evaporate back into the market you would at some point begin to think of it as money (that was) in the bank, that's now leaving the bank!

If you're talking about letting a winner run, that's another issue. But if you're talking about sitting on a winner and riding out a pull back and you are a novice trader with limited skill of reading price action or support and resistance or a momentum indicator(s) I strongly suggest that you take a good long look at how difficult it really is to make money in this business. As I said, "I have no idea of your trading style," but I'll guarantee you you'll see more $200 closed trades in your account than $800 trades.

Think positively, and trade to make money!! .... and change your handle (sumeet666) ... that 666 gives me the creeps :eek:
 
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