Always focus on how much money you stand to lose in any trade.
-Is that the appropriate entry? Or, are you chasing money where you will end with being stopped out?
-There is always another trade if you are hesitant in pulling the trigger on a setup.
The Stop Loss will help achieve Rule 1.
When trading, always use a stop loss or trailing stop.
In crypto, you can use a more lenient stop because of all the wicks.
Do not try to remember where your stop should be. You won’t exit when you should.
Cutting losses is achieved by the use of a stop loss which protects your capital.
If I didn’t enter this trade when I did, would I want to be in it now? If no, exit immediately, even before your stop is triggered. Don’t forget to raise stops as the trade continues in your direction.
If you lose a trade, do not try to make back the loss on the next trade.
After a loss, chalk it up as a loss and move onto the next while keeping emotion at bay. The more you try to make back your losses, the more you'll lose.
Averaging down is a long term investing strategy, not a trading strategy.
You should never need to add to a losing position if you followed Rule 2.
You won’t know where you need to be without knowing where you have been.
Record entry, exit, stop, position size, emotions, reason for entering, trade setup and profit or loss.
By following your trading plan and journaling your trades you'll set yourself up for success.
If you find in your journaling that you're not following your trading plan then you must focus on becoming more disciplined in trading and in your personal life.
Look back at your most successful trades and figure out why they were successful. Did you see a clear setup that you took? A predefined exit? A stop loss? Was your trigger from an indicator, a candle close, touch of support or resistance? You do not need an Ichimoku Cloud, 14 Moving Averages, RSI, OBV, a $750 custom algo, an MFI and two Pop-Tarts to make a winning trade.
Find what works easiest for you to win a trade and then search for that setup. When you find it again, take the trade.
Never blindly follow someone who posts a trade setup and some analysis. Remember, trading is a game where everyone tries to take your money… EVERYONE.
You never know if the person on the other side of the screen is being honest, so it’s best not to use your hard earned money to find out.
Even people who seem like they are looking out for your best interests can turn out to be ‘wolves in sheep’s clothing’.
That's it guys! I can assure you that if you'll make it a rule to master these 10 points, you'll see the tremendous improvement in your trading journey.
Did you find this helpful?
Are there things you'll need me to expound on?
Then let me know in the comments!
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