 Stockmarket Trading – what outcomes do you want?
Many people trade on a day to day basis not really knowing what they are trying to achieve except for making money. I believe it is essential though to have a daily/weekly/monthly outcome.
What I mean by this is a written set of trading goals that spell out quite clearly how many points you wish to make or how much net profit you wish to make. By having a written outcome you are more likely to have better focus and discipline in your trading day.
Is it worth trading past your daily target?
I know that trading can be really addictive, I belong to a live trading chat room where some members are there all day long,
watching their trading platforms and often trading 8 or 9 trades a day..the result….early in the day they can have some excellent profits..I mean 200+points but then they slowly give their profits back to their broker! and end up wondering where all their profits went.
By having a daily or weekly target that you stick to,means that you are stacking the odds more in your favour to be able to hold onto your profits. Trading is a numbers/percentage game, sometimes by trading less means overall you gain more profits
The other part of this equation is to have consistency in your trading. Yes you may have a great week but this does not mean that you now know it all. I would advise all new traders (or anyone trading a new strategy to only trade using the minimum stake. Start low
Do this for at least 2 months, if you are being consistent in your trading (not consistently losing!!) then up your stake incrementally every 2 months, ensuring that you are still being consistent.
WHY?
Well many traders who lack some experience do find,the excitement and thrill to potentially gain huge profits is too much and up their stake after 2 weeks of successful trading ..oh dear…Not only is this not a long enough time to see if your strategy is working, and you have all the correct criteria in place to be successful but you are also forgetting that emotion plays a huge part of the trading experience.
If you have been trading at £1 a point and things are going well- great ..incrementally start to increase this (£2, £4, £6)
This will get your brains and emotions gearing up in the right direction too. By not doing this what happens?
Well if you jump from £1 to £10 just think how you are going to feel as your trade has a pull back by 10 points which means you are now£100 down! it is a totally different reaction to £10 down.
By ensuring that you have traded consistently -meaning you have been making x amount of points over,say, a 2 month period, you will have more confidence that your strategy is working. That you can make those points, therefore if you are trading at £10 per point you know with confidence that your trade will reverse or if it is a losing trade, that it is just one of those losing trades in the % of trades
that lose. No panic, no sick feeling, no closing the trade early because you can’t bear to watch your money fly away.
Just consistent professional trading
SO Your tasks :-
A) Set a trading goal ..how many points do you want to make
Each day
Each week
Each Month
Write it down ..stick to it ..once you have made your points LOG OFF
You do not have to sit and watch your screen all day ..find a different hobby. If you have to ..then shut down your broker and just watch the chart patterns ..do not be tempted!
Remember why are you trading ..to make a profit or to make the broker even richer??????
B) Write down a plan of how much you are going to trade per point.
What you have to achieve before you increase the stake (ie 20 net points consistently per day)
When you are going to increase the stake and by how much
How Often
I know these steps seem really easy in theory but you will be amazed how effective they will be to your trading discipline and profits.
Remember ..these steps will only work if you take action!
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