I mean in the even that, for whatever reason, your trading becomes less effective and less profitable. Could be emotional problems, physical, competition and trading systems increasing efficiency – whatever.
Over the short term, do you have backup strategies? For example, do you trade intraday, but understand enough to be profitable at swing? Or maybe trade on level II quotes and time reversals intraday, but know how to use candlesticks and overbought/oversold indicators?
Over the long term, do you have career backups? A college degree that would allow you to hop right back into the work place? Maybe a safe million in a standard investing account, so you wouldn’t mind living off 10% market average (or more conservatively in bonds) while you sort yourself out?
Thanks for your help!
Trading indicators are best used along with money management and good risk control, using trading indicators alone will not enable you to be a successful trader, the market is just too random and unless risk is controlled over time your account will slowly get wiped out, regardless how good a “trader” you think you are.
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It’s hard enough to learn to make one trading strategy work. Once you can do that, you work it for all it’s worth.
Failure is not an option!
A trader, especially those that do trading for a living have sufficient knowledge and resources that they do not have or need "backups"
There are four factors that you need to be a trader and//or an investor
1 – A written sound trading/investment plan with rules that will not only help you but more importantly protect you, mostly from yourself. – Never trade on emotions, when emotions take over – you loose. Never enter a trade unless you know where and when you are going to get out. Always take a profit.
2 – Sufficient trading/investment capital. Use your own money, there’s no need to go into debt so that you trade/invest.
3 – A written money management program in place. Remember never invest 100% of your capital into any one security and never have 100% of your capital invested.
Allocate your investing capital evenly between all positions.
If a position drops 8%-10% you get out, you use stops as the price increase.
4 – A full and complete understanding of the rules & regulations of the industry
Traders do not care if the market goes up or down, they just care that the market moves. A stagnet market is a bad market for a trader.
Most traders have an investment accounts, they are not buy and hold investors, they may buy for the short term – 1-3 months or they may trade for the long term 3-6 months.
An investment that’s held for longer than 6 months is a trade that went bad.
One thing that traders/investors will never never do, and that’s to trade/invest on emotions. When emotions take over, you loose.
You don’t need to make a profit on100% of your trades, you can live very well if you only make a profit on 60% of your trades.
Trading/investing is not always about making money, most of the time is protecting what you have.
welfare and food stamps.