Knowledge is the key to profit and winning in the Commodity, Stock, Forex Markets and Futures.
Trading on hope is a fools game.
In my 2 decades as an analysis and trader of these market sectors, I have seen and practiced this fact for myself.
Do not attempt to locate a trade without a plan. Be sure the idea includes an exit technique. If the market activates the quit hint you had predefined, without feeling follow it fast.
Many traders go in the market with more “trust” than facts. Whether it be due to a news report or a tips, or that it just looks too perfect pass up because of some belief that the market cannot possibly go any lower or higher, the result generally ends up with the trader as a net loser.
You must take complete control of your own trading. The top way to do this is to get all the knowledge and information you can about the market you wish to trade and then make a plan.
Your plan should not only add the entry parameters, but also the quit parameters. The quit is arguably the most vital. Your trade should always be saved. Failure to accept, that you are wrong when the trade is going south one of the largest factors why many traders go bust.
Learn to trade on facts. There is no need for fear and hope that only get in your way. When you are capable to trade solely on facts, you will be capable to respond fast to trading opportunities and exit out when it is time to perform so.
One of the largest issues traders deal with when governed by fear and hope is that they find it difficult to trust that a market can just keep going up for many, many months. There is no such thing as “the market cannot likely go any lower or any higher! Yes it can!
Consider a new example of the Crude Oil. On 25 June, 2014 The Crude Oil market made an end push higher. Then the floor down out as the market continued to move lower, month after month. Actually, there was not individual bullish month leading into February 2015.
Was this a fluke? Not at all!
During these extensive bearish moves, you can bet that many traders felt that it could not keep moving lower during short lulls in price action and planned to buy in order to get in early on the next run.
Just guess how many traders went bust trying to purchase on hope and during these big declines.
If you trade based on facts and not on fear and hope, you would at the very least save your positions. At top, you would recognize that the market is bearish and should be appreciated as such, taking your trades with the trend based on your trading idea along with your quit plan. No fear or hope included.
If you find you are having problem doing this, my suggestion for you is to trade little while you work out your emotional attachment or perform paper trading.
Try trading little by opening up a small account where you have the capability to trade in mini or even micro sized positions.
Practice putting combine a plan of exit and entry and then follow through with the trade. Locate a stop-loss order in whenever you are filled into your trade. Only move your stop-loss based on your trading idea, and only in the way of the trade itself. Let the stop-loss order quit you out. Resist the need to pre-describe your revenue target as you quit as you are never truly going to know how far your trade could go unless you permit it. If your trust based on your plan that the market may be near the end of the move, easily move your stop-loss order nearer to your position.
After you have experienced detachment from fear and hope by executing your trading strategy time and time again with victory, marginally rise your trade sizes towards a daily sized contract and continue to note your capability to stick to the plan. If you continue to be winning doing so, then you will understand from there what to perform next.
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