Monday, August 1, 2011

Anatomy of Good Trade

95% of trading is mental /pychological.  Some traders will spend hundreds or thousands of hours learning this and that method, that indicator.   But they won't spend 10 hours to address their own pyschology of trading.    I hope it stays that way, because in that zero sum game, I'll be on the other side of the trade.

"Trading in the Zone" read it.   Nuff said.   If you don't read it, I don't want you commenting on this blog.  You got 2 months, it's simple.   

Here is a nice example from Laidtrades.   They don't rant alot, but they do some good charts.  

Here is what is good, and here is what takes the most erratic and dangerous element out of the trade ---  that be you.    A rational basis for entry, a rational stop (not too tight), and a rational target profit.

In this market, I keep reminding myself not to get greedy.   This is not your granpappy's market, this is a tape banging top, complete with pushes and pulls from the media circus and the political caucus.   the old adage of "let your winners run", well, screw that.   You got a profit, lock it in.   Set a rational target and then don't get greedy.  

This is the land of 78% retracements, or even 100%.   Indeed, it is different than 2 years ago.  

And go visit laid trades, they got good ideas, good charts, and vivacious Filipina girls, I am not joking!

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Insightful and Useful Comment!