Here are twenty things I do that make my trading profitable over the long term.
- I focus on trading only a few ETFs and stocks each year and focus my efforts in how to best capture any trend that emerges from one of them.
- I keep a very small watch list and remove items that are too volatile or range bound for my trading style.
- I am very quick to cut losses short, I hate losing money.
- I am very patient with winning trades and will let them run as far as possible until I have a good reason to exit. I have stops placed in areas that if prices go it shows that I may be wrong about my entry. I trail winning trades with stops to bank paper profits on reversals.
- I trade actual price action not my own opinions, I am reactive not predictive.
- I use moving averages and price levels as my technical indicators.
- I go to cash and take a risk off stance when prices start swinging wildly until volatility settles down and a break out occurs of a resistance or support.
- I try to never risk more than 1% of my total trading capital from my entry point on any single trade. 3% total AUM risk exposure has been my maximum this year in the past I have had 6% AUM total risk exposure.
- Every year I have reduced my maximum draw downs in my trend trading accounts.
- I trade multiple accounts and systems so I am diversified in methods and can benefit from the one that is most conducive to the market environment.
- My best trades are at the opening and closing hour, I tend to lose money when I try to actively trade all day.
- I trade off the daily chart only.
- My time frame can be one day or over a month depending on the strength of the trend.
- I trade my own methods and I am not influenced by other traders.
- I try to set my entries and exits and stop losses and trailing stops outside the areas of just noise. I want a break out or a bounce that really signals me to do something.
- I trade position sizes that are mentally comfortable I try not to stretch myself into stressful situations with large position sizes.
- For me one trade makes very little difference to me my concern is the next 100 trades and a long term outcome.
- I write my blog, author books, and participate in social media primarily to keep myself self learning and growing as a trader.
- I have read and studied over 300 trading/investing books, hundreds of charts, and learned much from interaction with some successful professional traders.
- I believe the secret to my profits have had more to do with the risk/reward ratio, the management of risk, and trading with the flow of trends more than anything else.