Hi
Stuck with that items ?
- What markets you will be trading
- What time frames will it be
- Maximum monetary risk per trade
- Average profit per trade
- Percentage of winning trades
- Trade size
The markets you will be trading should be choose d in conjunction with the time you can invest in trading and in conjunction with the derivative you want to trade ( Stocks, futures, options, ETFs or what ever ). To know this kind of mental setup is very important to all the small retail traders, which some of them some times think they are already in the business. I can tell you, that bigger boys, which work for a company, have other resources. They also have people around them which are trading for years and the communication in those teams is part of there power and success. Further more, they have daily meeting, in which strategies and trading mistakes are the discussions and so on. Most of you are not in a team and have to make decisions by being aware of that circumstances. As a beginner with little time and knowledge you should choose only one market.
If you have a job and do trading beside that job, you should choose a bigger time frame. All the rest is a road down to hell and suffering of losses and bad feelings about trading.
Maximum monetary risk per trade
? What amount of money do you want to risk, when you buy a share or what ever.
Profit per trade. Sure, as much and quick as I can. Write down how much you expect to make with each trade you will make.
% of winning trades. If you think, that every trade must be a winner, you have to write down : 100 %
Trade size. How much money do you think you will invest in each trade. Do not get confused with the maximum monetary risk per trade. There you say how much you want to risk and here you say how much you want to invest in each of your trades.
Example as continues and combined with part one :
As I want to trade stocks and not have to much time for trading, I want to invest in Bank Nifty. So Bank Nifty is my market.
As I work as a software producer, I can not spend all day long in front of a screen. I will choose a time frame of a week, so I can over think my trades over the weekend and make new trading decisions for the coming week.
My maximum monetary risk per trade ? Oh, I have a lot of money from my family and so I will risk ........................R per trade. As a logical result :
As I risk bigger amount of money, I will make bigger profits and so I think I will make an average of .............R per trade.
Percentage of winning trades : I am not sure about that, but as my friends tell me, that I am clever, I will have a rate of .......% winning trades.
My trading size will be ..................R, as it must be bigger as my risk size.
That's it. If this is a good example here, we will see in the coming parts.
DanPickUp