Not losing money or the break-even stage is the first stage to progress. This is also difficult to achieve, bcoz there is very high cost of trading (various taxes) is attached to Indian Market. You are not losing money means u are already winning the brokerage and other taxes amount.
Next step is to tune your system so that u can catch few jackpots when there are clear trends.
IMO: Out of 10 trades Usually, 7-8 trades cancells with each other (small profit-small losses). The rest 2-3 big profit trades which makes the differences. If any trader wants to survive in the long run, then u must able to catch few jackpots when the market gives easily.
Those 7-8 trades which cancelled with each other are the cost of trying to catch the jackpot trades with trailing stop losses.
Stop losses depends on the TF you are trading and entry. Whenever u want to put a trade, u must be sure about maximum risk and the possible reward. Put a trade only with either favourable risk-reward or when the certainty of success is very high.
Any mechanical system can generate 100s of signals, out of which may be only 40-50% may match low risk-high reward. The aim must be to catch a low risk-high reward trade and ride on profit until the trend end using trailing stops. If the system is good it will catch the jackpot automatically with the cost of overall 70-80% breakeven trades.
Treaders don't survive in the long run bcoz blindly following the mechanical system. Every trade signal is attached with different risk-reward. We need to filter out trades and vary position size according to risk-reward.
Next step is to tune your system so that u can catch few jackpots when there are clear trends.
IMO: Out of 10 trades Usually, 7-8 trades cancells with each other (small profit-small losses). The rest 2-3 big profit trades which makes the differences. If any trader wants to survive in the long run, then u must able to catch few jackpots when the market gives easily.
Those 7-8 trades which cancelled with each other are the cost of trying to catch the jackpot trades with trailing stop losses.
Stop losses depends on the TF you are trading and entry. Whenever u want to put a trade, u must be sure about maximum risk and the possible reward. Put a trade only with either favourable risk-reward or when the certainty of success is very high.
Any mechanical system can generate 100s of signals, out of which may be only 40-50% may match low risk-high reward. The aim must be to catch a low risk-high reward trade and ride on profit until the trend end using trailing stops. If the system is good it will catch the jackpot automatically with the cost of overall 70-80% breakeven trades.
Treaders don't survive in the long run bcoz blindly following the mechanical system. Every trade signal is attached with different risk-reward. We need to filter out trades and vary position size according to risk-reward.
Dear headstrong007 ,
Very well said....... specially highlighted part( Bold Red)..........this is essence of successful trading .
HEM