Friday, September 28, 2012

Winning Trades

Today we shall find out what are the key ingredients of a good trade and how to pick one.

Strong SAR
Presence of WR
Constructive candlestick patterns
Fibonacci retracement level

These trades were actually trades taken with actual money on the line, 7% RISK PER TRADE.  I call this "ROCKET" trades because they are designed to result in explosive profits (due to high risk too).

Psychology Behind Rocket Trades:

I'm willing to SELL/BUY MORE if price goes against me - I am very confident about my trade (explains the large risk).

I only take the BEST setups, no marginal setups. BEST as in it meets EVERY INGREDIENT essential for a ROCKET trade.

I RISK a LARGE PERCENTAGE of my account eg. 7%-10% to enforce that i only take the BEST TRADES.

Pareto principle states that 20% of your trades are responsible for 80% of your profits. ROCKET trades are designed to MAXIMIZE these 20% trades and MULTIPLY them by 7% (7% risk) while ELIMINATING the remaining 80% trades that yields only 20% of your profits.

Last but not least, take trades bearing in mind the end result. WIN-LOSS RATIO: 8:2 (minimum)

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