Surfing in Taiwan
Most traders seem almost entirely concerned with their trade entries when in fact the more important part of trading is money management. Money is made or lost depending upon how well you manage your trades and your money.
No trade entry strategy or trading method would be complete without a money management plan. The most important aspects of money management for a trader, are position sizing and risk reward.
Position sizing here refers to the number of lots that you placed. We are talking about the SIZE of the position you are trading.
Learn what you can and cannot control
Many traders try to control everything, and this thinking leads them to being unable to mentally handle a trade that is quickly moving against them or a trade that just barely misses their profit target and then reverses. These are just two of many examples of the consequences of being afraid and thus trying to control everything in one’s trading.
You can never know what will happen FOR SURE in the market, until it happens (and it’s too late to take advantage of). So, as traders, we are trying to make consistent money in a game with a consistent strategy that we built. You can’t know what WILL happen, only what MIGHT happen. Remember, we are ‘playing the odds’ of our trading edge in the market, not acting on certainties.
Last week, I showed the outcome of surfing in the commodity market (Crude oil). This week, let us take a look at Indices (Taiwan) using the same strategy.
** Trade plan using COP5 & Emolines
==> When price closed above/below COP5, take note of Emolines, as we need this 2 indicators to be aligned.
Day 3 -- A day without volatility.