Methodology of successful trading
Success in trading is all about discipline, patience, learning from mistakes and market sense. Trading is a high-risk activity. But with a competent approach it can become a source of stable income.
Who is this instruction for?
This manual is created for beginners who want to learn successful trading on the stock exchange.
What will you find in this manual?
- Tactics, strategies and subtleties of trading
- Money management tips
- Information about technical analysis
- Warnings about trading risks
Recommendations:
- Don’t bet “all-in.”
- Do not use leverage recklessly.
- Do not give in to greed and excitement.
- Develop equanimity, endurance, accuracy, punctuality.
- Use stop-limits and take-profits.
- Ensure the safety of your cryptocurrency.
- Reread your manual before a trading session. Record your trading and compare with the instructions in the manual to learn how to work on mistakes and record their presence for elimination.
1. Risk Management:
- Use stop-limit orders and trailing stops.
- Exit trades on time at X% to +Y% profit, following the principle of A to B (where X, Y, A, B are the numbers of your strategy).
- If you use trading robots – program them to work smoothly according to your strategy and check if everything works on small amounts of money before increasing the order.
2. Entering a trade:
- Enter a trade only when you feel confident and have carefully analysed all factors.
- Carefully weigh the opportunities carefully. Remember, leveraged futures trading increases stop risks.
3. Profit taking:
- During a rise, some traders lock in profits and sell on a pullback. It is up to you to choose a strategy of partial profit taking or full profit taking during growth.
- Don’t forget to factor in the cost of exchange commissions for entering and exiting the market or limit order. Double-check everything on X% of the deposit with xIO leverage before you start trading for a large amount (Z% of the deposit and more).
4. indicators and signals from TradingView:
- For Japanese candlesticks, drawing support and resistance levels is enough.
- Some traders still use MACD, SRSI, Ichimoku Cloud/Signal, volume indicators, Gann angles, Fibonacci levels. At the moment I do not use these indicators, as I consider their action to be lagging behind or ahead of reality.
- If you choose indicators, choose those that bring more profit in a certain trading range. Remember: the main criterion is to understand the laws of the market and trade according to the market.
5. Short-term trades:
- Use common sense and avoid uncertainty when trading.
- Trading without a stop loss leads to deposit loss – a trader enters a state of tilt (inability to stop trading) and drains the deposit. Avoid short-term trades without stop-losses in case of market uncertainty.
6. Stop limits:
- Be prepared for unexpected market movements. Be sure to use market stops, floating or fixed stop limits. Do not enter trades without stops.
- If you enter a trade and then place a stop, do it immediately without thinking. Even if you already have a minus, just close the trade according to the risk management – up to X% of the deposit. The amount of X% should be the grail of success.
- If you trade and lose N-T% of your deposit in one trading session, know that you are moving out of the figure of 3% successful traders towards 97% losers and failures.
7. Risk Management (second version and repetition is the mother of learning):
- The basis of success in leveraged trading is that you enter a trade on the principle of X to Y or (X dollar stop and the goal should be to make Y dollars). Example: 1 to 3 classic, 1 to 10 high targets and short stops and so on.
- You cannot fail to close a trade on a stop order.
8. Wave theory:
- Elliott Wave Theory in the stock market sometimes works. Enter a trade after the completion and change of trend. Take into account signals, news, trader experience, RSI, timeframes, Fibonacci, correction, time zones, stock and commodity markets.
- All of the above are just tools. Remember that successful trading is a set of successful statistics and experience on small amounts of money, after which the transition to larger amounts.
9. Market Analysis:
- Before you start trading, analyse thoroughly.
- Do a comparative analysis.
- Read the news on CNBC.
- Define Flat.
- Calculate the degree of Volatility.
- Use financial instruments like: gold, oil, funds, bitcoins to determine the general market sentiment to decide whether to long or short a position.
10. Are you gambling? Don’t trade away.
- Trading should be break-even.
- Gambling leads to even greater losses and draining of the deposit.
11. Do not let go of the position:
- In the stock market, it is important not to give in to emotions and not to close a position too early without fulfilling the stop to profit ratio settings in the strategy.
- Even a small profit on price movements is already an achievement, which is the beginning of bigger wins.
12. trading on minute trades:
- The probability of making money on minutes exists, but it requires precise work.
- Scalping is a trading method where the trader enters numbers based on resistance and support levels with mathematical precision.
- Stop-limit orders should be used as a safety net. Choosing a site to trade on minutes requires careful analysis of exchanges and broker.
13. The principle of good trading:
- A good trade is a closed trade, even if it is in the negative.
- Before opening a position, make a plan to exit it and execute it!
- Learn to find support and resistance levels to make accurate stop and target placement decisions.
14. The rule of long-term trading (investments):
- In long-term trading (investments), you must switch off the monitor and wait for the completion of the trade with a sound alarm on your phone, a properly set trailing stop in the trading robot or terminal of the exchange or broker (if such allow you to enable such a function).
15. Maximum stop:
- Trading is based on instruments, not emotions, so you need to look for filigree entry points, and the stop should be mandatory and as short as possible. Any improvisations against this rule are punishable.
Note: The information in this text is not investment advice. Before making investment decisions, you should do your own research and analysis.
Source: https://youtube.com/@21mln