It's been said that if you don't know where you're going, you could wind up anywhere.
The same is true in trading - if you don't know what it is you're trying to
accomplish, you're not likely to accomplish much of anything. One of the biggest
pitfalls we face as aggressive investors is a lack of a specific plan.
At the very least, your trading plan should have a monetary goal, and a proven
method. A lot of traders have neither, opting instead for a 'gunslinger' approach. In
other words, they take trades that seem solid at the time, and they hold that
position until it becomes more painful to hold it than to not hold it (and they may
even make an occasional profit). But that lack of focus and specificity will
ultimately lead to poor performance. Instead, smart traders treat their trading
activities as a business.
First, let's look at setting tangible goals. If you know that a 50% return is what
you need, then you can plan accordingly. You may find that the rewards you seek don't
require much risk. To earn 50% in a year, you'll need to earn about 4% per month on
your account. That type of return is quite possible, and easier to swallow than the
large 50% figure. By focusing your attention on those smaller increments, you'll not
be forced to take excessive risks. The other benefit to a specific goal is the fact
that you can track your progress. If you know that you averaged 5% per month for the
first 6 months of the year, you can scale back on your risk for the last 6 months of
the year.
The benefit of a proven method or system is also twofold. First, if you have a plan,
you'll be able to ignore all the data that doesn't affect your trading. The media is
not kind to traders - at any given time, you could find ten reasons to buy a stock,
and at the same time find ten reasons to sell it. That emotional roller coaster is a
nightmare, but if you are systematic and approach it as a business, you won't talk
yourself out of good trades (or keep yourself in bad ones). Second, if you have a
system, you actually have something to analyze. You can't improve 'gunslinging', but
you can improve your trade signals.
These are two simple ideas, but exceedingly difficult to do. It's tough because it
forces us to acknowledge some failures, and we all seek to avoid pain. It also forces
us to look at our account balances, which again can be a source of pain. But the best
traders know exactly where they stand financially, to the penny, and they know
exactly why each trade failed or succeeded. (These are the same guys who actually
still open their account statements) To know where you need to go, you have to know
where you are.
As a first step, I recommend starting small. Set a goal of a 5% return for next
month, and set a goal of winning trades 50% of the time - say 2 out of 4. Once you
get into the success habit, you can then enhance those goals.
It's been said that if you don't know where you're going, you could wind up anywhere.
The same is true in trading - if you don't know what it is you're trying to
accomplish, you're not likely to accomplish much of anything. One of the biggest
pitfalls we face as aggressive investors is a lack of a specific plan.
At the very least, your trading plan should have a monetary goal, and a proven
method. A lot of traders have neither, opting instead for a 'gunslinger' approach. In
other words, they take trades that seem solid at the time, and they hold that
position until it becomes more painful to hold it than to not hold it (and they may
even make an occasional profit). But that lack of focus and specificity will
ultimately lead to poor performance. Instead, smart traders treat their trading
activities as a business.
First, let's look at setting tangible goals. If you know that a 50% return is what
you need, then you can plan accordingly. You may find that the rewards you seek don't
require much risk. To earn 50% in a year, you'll need to earn about 4% per month on
your account. That type of return is quite possible, and easier to swallow than the
large 50% figure. By focusing your attention on those smaller increments, you'll not
be forced to take excessive risks. The other benefit to a specific goal is the fact
that you can track your progress. If you know that you averaged 5% per month for the
first 6 months of the year, you can scale back on your risk for the last 6 months of
the year.
The benefit of a proven method or system is also twofold. First, if you have a plan,
you'll be able to ignore all the data that doesn't affect your trading. The media is
not kind to traders - at any given time, you could find ten reasons to buy a stock,
and at the same time find ten reasons to sell it. That emotional roller coaster is a
nightmare, but if you are systematic and approach it as a business, you won't talk
yourself out of good trades (or keep yourself in bad ones). Second, if you have a
system, you actually have something to analyze. You can't improve 'gunslinging', but
you can improve your trade signals.
These are two simple ideas, but exceedingly difficult to do. It's tough because it
forces us to acknowledge some failures, and we all seek to avoid pain. It also forces
us to look at our account balances, which again can be a source of pain. But the best
traders know exactly where they stand financially, to the penny, and they know
exactly why each trade failed or succeeded. (These are the same guys who actually
still open their account statements) To know where you need to go, you have to know
where you are.
As a first step, I recommend starting small. Set a goal of a 5% return for next
month, and set a goal of winning trades 50% of the time - say 2 out of 4. Once you
get into the success habit, you can then enhance those goals.
Se não receio o erro é porque estou sempre pronto a corrigi-lo
There's no bull side and no bear side. JUST THE RIGHT SIDE!
#forex4u - chat forex MIRC
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