“Stay in the center of the circle, and let all things take their course.” – Lao Tzu
For long term profitability a trader has to develop an edge over other traders, and then leverage that edge using discipline. Money comes from a trader’s ability to develop a system of robust entries and exits, and trade it using a plan that incorporates risk management.
Regardless of what is going on around you in the markets, stay inside your circle of competence as a trader:
- Follow your trading plan.
- Take your trade entry signals and set ups.
- Manage your risk closely.
- Cut your losses when you are proven wrong.
- Keep trading within your own time frame.
- Keep following your own tested system.
- Don’t start trading out of fear.
- Don’t start to position size based on greed.
- If you are on a losing streak, trade smaller not bigger until you start winning again.
- Do not let others predictions and opinions influence your trading; trade price action.