After blowing-up money many time, I learnt my lessons.
Hope these will be useful to someone in need like me. I will try to keep it simple.
1. *Before* picking a trade you should know what loss you are willing to take, what ever may be the loss amount you should know it.
- Unless you have clarity on the loss you are going to take, you should not enter a trade.
2. Shift *focus* from entry to exit.
- We all setup charts to find entry point. My learning taught me to setup charts to tell me when to exit.
- This is not same as stop loss.
3. Your *time frame* should depend on the amount your are willing to loose.
- For example, a 3 minute time-frame chart with supertrend signal will keep the losses at 10 to 20 points on CRUDE. 30 to 60 points losses are possible on 30 mins charts. etc..
- Lower time frames can keep losses to minimum, but broker will be happy.
4. Moving averages don't show buy or sell signals. They are just *trend indicators*.
- Of all the best are Exponential MA and Hull MA.
5. *Never trust* crossovers, they are used to catch fish.
- Crossovers provide confidence to buy and fear to exit, everyone knows it, including the big guys.
- Any technical indicator can be made to show a signal as long as the operators willing to take the risk.
Hope it helps someone, who is going through similar situations I went through.