Capital preservation is important. Risk management is important. But the trader’s job is to risk and make money, not sitting in the office to preserve capital.
When it is time to trade, just trade. Capital is a tool for you to use to make more money, not for you to preserve.
If you want to win, you’ve got to know the rules; and also, you can’t win if you are not at the table.
Just trade.
Looking out the window, you see it is raining. Put your hand out of the window, you know it is raining. And yet, you still feel the need to view the website or call Bureau of Meteorology to confirm if it is really raining. Some traders trade in this way. Is the the word “confirmation” really confirming something or it is just showing the lack of confidence of your own strategy, or even your own opinion?
I have stopped posting my trade long time ago for various reasons. Anyway, I thought I might throw in an example today to show how I trade gap. In fact, I am not really sure if �I can call this a gap fill strategy, as it is basically a simple support/resistance trade. After all, everything comes back to your level. Define your level, and plan a trade around that. That’s what I am doing.
Here is 5-minute chart of AUDJPY. �There were quite a number of FX pairs with Sunday gaps this week, I picked this pair as it was showing me the cleanest setup at the time I was back to my workstation. I waited for the pair to retest the 5-min level, and put the target at the gap opening , the end result gave me slightly more than 2R.
Found this clip on Youtube. Linda Raschke�discusses her pre-market preparations, technical and fundamental analysis, and important steps traders should take to prepare for each trading day.
This is a short trading lesson from Bella (@smbcapital), the author of One Good Trade: Inside the Highly Competitive World of Proprietary Trading (Wiley Trading)
(I highly recommend the book). Trading is a skill. “The answer is, you develop your trading skill day by day”. Excellent point. Watch this after you have summarized your trading week.
Here is another video clip of Linda Raschke. This time, she talks about Why & How to use and determine stops. Since today 31st May is observed as bank holiday in both London and U.S. I’d rather spend some time watching the video instead of the thin volume market.
Here we go, enjoy.
