The top 5 things I learnt from trading


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This is a thread where all traders can post – ‘5 most important things that I learnt trading markets’, so as to share knowledge and experience with each other. Even if a point is made in a post earlier, it does not matter, you can repeat it, as it is the top 5 things you have learnt trading.

One request to all – do not reply to the thread, which will clog it up with unnecessary responses – (only post your ‘5 most important things’) If you appreciate any post – just thanking will do. Also, do not post 6th things, else we might have of 10, 20 or more, which will make the post only academic and not – 5 most important things….

Do make your points short and easy to understand – not a para or a chapter.

Here’s my top 5 :

Trade only in the direction of the main trend – End of Day or Intraday. (*HHHL/LHLL)

Be a professional loss killer – and let your profits run. Never increase your stop loss – ever. You can always get back in the trade, if the charts justify.
While in entry - remember it is your money at risk, so it must be small. While in profit after entry - it is the money that the market has given you (risk free trade) so let it run.

Take only high RR (reward to risk) trades.

Entries are important – but exits more so. Be rigid with your rules, flexible with your targets. As no one can take more profit than the market is willing to give - trade with trailing SL, and never let a profitable trade turn into a loss.

Try to improve some aspect of self and trading each day – this can be done by analysis of each trade (entry and exit) and learning about trading psychology, discipline, money and risk management, position sizing etc. With 1% improvement each day, it takes only 100 days to be a 100% better trade.

* Higher High Higher Low / Lower High Lower Low


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My one of essential/key point in life or in trading is "Normal and Abnormal" Behavior/situation....see from normal behavior we learn little or for abnormal situation/event and frame rules and implement those rules....u will see the difference.
....and i don't/hate to use words .....LOOKS LIKE...HOPE....Market will go if breaks this or that high/low.......

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1.Markets are controlled environments and controlled by a syndicate aka market makers.
Markets are designed to loose money and trading is dealing with un certainity.
One cannot control how the market behaves but one can control only himself.
Market doesn't ask one to trade and hence one should take responsibility of the outcome for which the person alone is solely responsible.

2.Keep the strategy simple.
There is no holy grail - if at all one markets would will that gap.

3.In trading money is at risk.
Take calculated risk.Position sizing and risk per trade are important.
Never violate MM to keep your mind calm.
When one violates the MM and take leveraged position - emotions comes to place ie Greed,Fear,doubt,Frustration,panic,impatience,over confidence,revenge trading, pressing to recover the losses.

4.Trend is your friend and hence higher time frame or swing trading is better
and easier than day trading.

5.Trust your system and let profits run and cut short your losses.
Don't try to predict top or bottoms.
Money is made in between not at the top or bottom.
Markets can remain illogical for longer duration and never fight with the markets (Trend).


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5 things i learnt
no1] i must follow -phantom of pit
no2] i must develop discipline & right psychology as a trader(being stoic )
no3] i must understand internal mechanism of market before i enter.
no4] i must trade manage as per BEING IN NOW ,instead of past trade
no5] i use higher timeframe bias,macro-economy bias, ethically professionally run good company only in my scan list & TRADE IN THEM as oppurtunity comes based on my experience/past observation in market


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1. Plan your trade and execute the plan
2. Do proper money management
3. If you are in loss accept it and get out soon..and if you have missed any rally let it go and there is always the next
4. Never add/average losing position
5. Don't over trade..limit the number of trades per month/week


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What Beginner trader thinks when they start trading...
PROFITS:- All the profit they can make trading from his/her COMFORTABLE environment.

BREAK-EVEN:- He/she has NO IDEA what is BREAK-EVEN.

LOSS:- They would have never started if they had thought about LOSSES on a first place (including me).

What it should BE...
LOSS:- Trader must consider how much they can lose on any particular trade so that they can SURVIVE the LEARNING CURVE. Top most priority.

BREAK-EVEN:- Once losing part is under-control, they should try to BREAK-EVEN on there trades, Because traders will hold some trades longer then they should. (GREED of more and FEAR of missing out)

PROFIT:- Last stage is PROFIT, which can only be achieved if trader has mastered the last two stages, The most difficult stage to MASTER is BEING PROFITABLE day in and day out. (EGO)

So what i have LEARNED is to TRADE SMALL till i become CONSISTENTLY PROFITABLE. If BEGINNER trader has a ACCOUNT to take a POSITION of 100 lots he SHOULD opt for only 2% of it.
  1. Trading is a performance activity. Winning & losing streaks are part & parcel of trading.

  2. Always trade as per your current understanding, without worrying about the outcome.

  3. Respond to the Price Action, S/R and Volume cues as per your feel of the situation. Trading skills will keep improving with experience.

  4. Confidence in one's trading comes from the mastery conferred by one's learning and development, not from psychological exercises or insights.

  5. Trade freely without any pressure for being right, learning is a continuous process.

Happy :)
a) In Day trading it is very difficult to earn by directional view. Try to adopt non directional approach.
b) For positional trades, try to use hedging instead of stoploss. Your loss should be predefined at the beginning of trade itself. Always trade in direction of trend.
c) EMA crossover signal hints are good for longer timeframe not for shorter timeframe in longrun. Shorter timeframe can be used for entry/exit purpose only keeping longer timeframe in mind, but should not be used for trend following. May be few will contradict here, but this is my view only.
d) At the end of each month, Even in huge loss, your trading wealth should not decrease more than 15% in any condition.
After any big loss( say more than 3% ) , don't do trading for 1-2 hrs, preferably not that day itself. Moreover forget the loss asap and never try to recover them by changing you well known strategy .

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