This, this and this. I am more of a doer than a waiter, so patience is a very hard thing for me. But I completely agree, and I use the fishing analogy. You just sit there, waiting for the fish to come. Some days they don't come at all, other days they are jumping into your bucket.
It would be nice to see a stats on if successful traders are also good fishermen....
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There are many good guidelines, but here is probably my #1 as of now:
Know why you are taking the trade; have a reason based on something you can explain.
The reason is this: whether the trade works or not, and whether the idea is logical or poor, the experience can be learned from and improved upon. Contrastingly, a trade taken on a whim that has no thought behind it and is spur of the moment, win or lose, cannot be learned from and is not repeatable. Whatever the result, you either got lucky or were unlucky; it was mostly random.
Like most traders, I used to shoot from the hip with little understanding of the day's context, but after developing the habit of planning and thinking through an idea and then focusing on executing the idea, I have become more consistent. It is easier to just turn on the screen in the morning and try to get in the flow, but unfortunately that way of doing things often leads to inconsistent results, and usually reflects a lack of a strong work ethic.
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Sounds like a joke at first, but the more I thought about it, the more I realised that it actually is pretty spot on...
Provided you have sufficient knowledge and a sound edge (which are not rules but prerequisites for successful trading) I found that almost all actions having a really negative impact on P/L can be classified as rather stupid.
Losers are part of the game, no trader will have only winning trades. With these "normal unavoidable" losers a trader will be fine (simplified and provided he has an edge), add in some "stupid" losers and the picture changes drastically.
Hic Rhodos, hic salta.
Last edited by vvhg; March 5th, 2013 at 02:52 AM.
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* If investing gets too difficult for a seventh grader to understand, the system is needlessly complex
* Markets produce an enormous volume of information, much of which is redundant
* In every game and con there's always an opponent, and there's always a victim. The trick is to know when you're the latter, so you can become the former
The following 2 users say Thank You to Jonson for this post:
Although Mike asked for the "SINGLE most important rule of trading", the result is that we've got a nice selection of various important things one has to take care of, if he or she wants to succeed in this game
I also asked "why", but most people can't answer that one.
Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.
Need help? 1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first. 2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses. 3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make. 4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance. 5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers. 6) Help using the forum? Watch this video to learn general tips on using the site.
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