HOW DO YOU KNOW YOU HAVE A TRADING EDGE ?

HOW DO YOU KNOW YOU HAVE A TRADING EDGE ?

1. Your trading edge should be confirmed by statistical analysis.
This way is the easiest to apply and the most difficult to create. If you have a statistical analysis of your trades then you know for sure if you have an edge. Suppose you have recorded the details of actual trades taken over a period of three years. There are five hundred trades and you have the reasons for taking each trade, together with the the gain or loss  per trade. Putting this data into Excel can give you a complete statistical analysis of your performance. If you are making more money than you lose, with a reasonable upward sloping equity curve, then you have an edge.
But that was the easy part. The difficult part is to have actually kept a record of your trades. Suppose you did not keep a record. Then what do you do? Then we come to the other methods.

2. Back-Testing a mechanical trading system.  
You may be trading with a mechanical trading system - a method that has a set of rules and these rules have been tested on past data. If your trading rules can be tested over previous / past data, then do so. The results of the back test with give you some idea if you have an edge or not. If the performance over the data period is satisfactory then at least you have an edge in the past.

3. Be consistent.
if you are not using a clear set of rules which can be back tested, then this one is for you. You should be consistent with your trading method. Follow the same set of rules for all your trades. Chances are that your consistency will ensure that you have an edge.

QUOTES FOR STOCK TRADING

QUOTES FOR STOCK TRADING INDIA
stock trading wisdom quotes
lessons in stock trading stock investing
trade less
trade with small SL
Trade with higher risk reward ratio.
Remain consistent in market.
Don't sit in front of screen whole time.
Have tremendous success in your system as far as it is not giving you losses.
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Seven characteristics of an objective Trader BY Mark Douglas, Author of The Disciplined Trader

Seven characteristics of an objective Trader BY Mark Douglas, Author of The Disciplined Trader

1.      You feel no pressure to do anything.

2.      You have no feeling of fear.

3.      You feel no sense of rejection.

4.      There is no right or wrong.

5.      You recognize that this is what the market is telling me, this is what I do.

6.      You can observe the market from the perspective as if you were not in a position,

7.      even where you are.

8.      You are not focused on money, but on the structure of the market.

40 Trading Rules For Success In Trading Stocks

40 Trading Rules For Success In Trading Stocks

1.    Keep records of your trading results.

2.    Keep a positive attitude, no matter how much you lose.

3.    Don’t take the market home.

4.    Continually set higher trading goals.

5.    Successful traders buy into bad news and sell into good news.

6.    Successful traders are not afraid to buy high and sell low.

7.    Successful traders have a well-scheduled planned time for studying the markets.

8.    Successful traders isolate themselves from the opinions of others.

9.    Continually strive for patience, perseverance, determination, and rational action.

10.  Never cancel a stop loss order after you have placed it!

11.  Place the stop at the time you make your trade.

12.  Never get into the market because you are anxious because of waiting.

13.  Avoid getting in or out of the market too often.

14.  Losses make the trader studious – not profits. Take advantage of every loss to improve your knowledge of market action.

15.  The most difficult task in speculation is not prediction but self-control. Successful trading is difficult and frustrating. You are the most important element in the equation for success.

16.  Always discipline yourself by following a pre-determined set of rules.

17.  Remember that a bear market will give back in one month what a bull market has taken three months to build.

18.  Don’t ever allow a big winning trade to turn into a loser. Stop yourself out if the market moves against you 20% from your peak profit point..

19.  You must have a program, you must know your program, and you must follow your program.

20.  Expect and accept losses gracefully. Those who brood over losses always miss the next opportunity, which more than likely will be profitable.

21.  Split your profits right down the middle and never risk more than 50% of them again in the market

22.  The key to successful trading is knowing yourself and your stress point.

23.  The difference between winners and losers isn’t so much native ability as it is discipline exercised in avoiding mistakes.

24.  In trading as in fencing there are the quick and the dead.

25.  Speech may be silver but silence is golden. Traders with the golden touch do not talk about their success.

26.  Dream big dreams and think tall. Very few people set goals too high. A man becomes what he thinks about all day long.

27.  Accept failure as a step towards victory.

28.  Have you taken a loss? Forget it quickly. Have you taken a profit? Forget it even quicker! Don’t let ego and greed inhibit clear thinking and hard work.

29.  One cannot do anything about yesterday. When one door closes, another door opens. The greater opportunity always lies through the open door.

30.  The deepest secret for the trader is to subordinate his will to the will of the market. The market is truth as it reflects all forces that bear upon it. As long as he recognizes this he is safe. When he ignores this, he is lost and doomed.

31.  It’s much easier to put on a trade than to take it off..

32.  If a market doesn't do what you think it should do, get out.

33.  Beware of trying to pick tops or bottoms.

34.  You must believe in yourself and your judgement if you expect to make a living at this game.

35.  In a narrow market there is no sense in trying to anticipate what the next big movement is going to be – up or down

36.  Never volunteer advice and never brag of your winnings

37.  Of all speculative blunders, there are few greater than selling what shows a profit and keeping what shows a loss.

38.  Standing aside is a position

39.  It is better to be more interested in the market’s reaction to new information than in the piece of news itself.

40.  In the world of money, which is a world shaped by human behavior; nobody has the foggiest notion of what will happen in the future. Mark that word – Nobody! Thus the successful trader does not base moves on what supposedly will happen but reacts instead to what does happen.

9 QUESTIONS TO ASK AND THINGS TO CONSIDER BEFORE SELECTING YOUR ADVISOR

9 QUESTIONS TO ASK AND THINGS TO CONSIDER BEFORE SELECTING YOUR ADVISOR

1. What risk-reward ratio will you give me?
2. Please give me 10 investors and traders awareness and educational articles prepared by you.
3. What is your educational qualification and experience in market of how many years?
4. Are you providing advice and recommend only to trade or investment also? (one must recommend and suggest about long term investment also)
5. Will you give me trading calls in segment which I tell you or will you tell me in which segments and sub segments to trade? (advisor must not let client to select their own segment and sub segment, because advisors must know better than clients who are seeking advice which segments and sub segments to trade and which not)
6. Are you giving free trial or not? (true advisor will not give free trial. Reason is simple. He must be already having enough paid customers and not have time to give free tips. Also such advisor believes ‘free things has no value and quality thing always has value and are costly. He will ask you ‘How can you take judgment of my service in 2 day of sample calls? This is unreasonable’.)
7. Do you give trades daily or there is no fixed frequency of it? (There should not be any frequency of trading calls giving, every day is not good for trading and no one knows which day will present best opportunity and which day worst. So, there should not be fixed frequency of giving calls.)
8. What is your accuracy ratio? ( If the advisor says 70% or 90%, beware. Ask him about ‘WHAT NET PROFIT WILL YOU GIVE ME AT THE END OF SO AND SO NUMBER OF TRADES?’ Do not ask about accuracy ratio in %. It doesn’t make any sense and doesn’t give you any idea about accuracy either.)
9. I have 1 lakh trading capital, what kind of exposure will you give me? (if the advisor say that he will make you trade on full exposure, then beware. A good advisor always cuts 30% from your trading exposure and then gives you positions on the rest of size.)

BEST OF LUCK WITH YOUR HUNT FOR A GOOD ADVISOR!

Daily Mental Conditioning For Becoming a Successful Trader

Daily Mental Conditioning For Becoming a Successful Trader

Deciding to be a profitable financial trader is the first step in becoming one. Trite you say? Not really. Missing this one step or doing it out of order xplains why 90% of brokerage accounts go to zero within the first year, many doing so in the first 4 months!

In addition to arbitrarily deciding to be a profitable financial trader, a more powerful and lasting way is to use psychological conditioning on yourself so that you CONSISTENTLY decide that you are a profitable trader Here’s my interpretation of the method for doing this that I learned from the famous success guru I alluded to in my comments two blogs back.

First, write out the sentence below on a piece of paper.

“FROM THIS MOMENT FORWARD, I AM A PROFITABLE TRADER”.

Second, consider the pain you have experienced before because you have not consistently thought of yourself as a profitable trader. Imagine experiencing that again in the present and future. Do this for 30 seconds. Notice how you feel as you do that.

Third, consider the pleasure you would experience in the present and the future if you did make this decision. Do this for 30 seconds or longer. Imagine yourself getting a string of winning trades in your brokerage account (stocks, options, emini market average futures, pork belly futures, orange juice futures… whatever). Notice how you feel as you do that.