Lets take two traders, Dow and Jones. Their fundamental, technical and risk management rules are the same. They have been allocated the same start up capital, charting software and market.
Fast forward 2 months of trading activity, what do you think the result will be?
Dow has made 20% returns on initial capital, Jones is 30% down.
It is very intriging don't you think that two traders can have the same weapons but different results.
Follow me on this 10 part series ride and I will show you the main reasons why this has occurred.
Part 1
Holy grail
Imagine having a online stock trading system that will get you into a trade at the best market opportunity, the management of your trading postion is second to none, the exit always results in profit. Does not matter what market or timeframe you trade, you will make money all the time. Cash like clockwork hey. Unfortunately not.
Trading is a law of probabilities, that means no matter how good your stock system is, you will always experience a loss. It is like flipping a coin. Heads you win, tails you lose. All you want is that edge.
You might have a system that trades breakouts, countertrends, trends or pullbacks. Long term, short term, intraday or scalp trading. Regardless of the strategy you have, it will not guarantee you success.
Concentrate on a sytem that has minimal drawdowns by backtesting it using price data, also paper trade to get comfortable with executing your orders, but importantly get used to the emotions you feel while in a trade.
Stick to your trading plan regardless of the market action over at least 6 months to really see if your strategy works.
In trading you are consistent or non-existent.
Ken Otalor
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