Day Trading Tips and Tricks

May 1, 2019

Erich Senft

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A New Perspective on Losing Trades

When you are analyzing your charts look for a good trade, do you also actively look for bad trades to ignore?

Here are three reasons why you should do just that. 

Put Away the Rose Colored Glasses

Losing Trades and Rose Colored GlassesEmbracing losing trades helps you to avoid the tendency and temptation to see every signal as a great trade. High-performing traders are great at quickly recognizing significant trade signals. They’re skilled at knowing which signals will play out, and which aren’t worth the energy.

For less seasoned traders, it can be difficult to determine a weak signal from a sure thing. And that means they can chase erroneous signals or trades that won’t play out.

If you can find a way to identify potentially dangerous trades more quickly, you can remove the “chase-me-I’m-shiny” trap of overtrading. And you’ll have more time to work on the high probability trades that are worth your time. 

Protecting Your ASSets

Losing Trades and protecting your accountAccepting the reality of losing trades will help you will better protect your trading account. Our experience in self-directed retail trading shows that risk management can help you trade profitably and grow your account.

However, if you’re working to improve your trading performance, it’s important to remember your trading funds are a finite resource. If you’re juggling too many trades, you’ll minimize the impact risk management offers and not be able to manage your trades correctly.

But if you remove the poor-quality leads from the equation as quickly as possible, you can focus less on juggling and more on meaningful high probability trades. You’ll have more time for the constructive analysis that can lead to for profitable trades. 

Concentrate on the Signals that Matter

The ability to quickly deal with losing trades and continue to trade productively will enable you actually to identify the types signals that have a positive impact on your trade plan.

Focus on Losing TradesJust like in the brick and mortar business world, data insights are critical for executing a strategy. If you can segment the high probability signals and define commonalities like trend direction, support and resistance points, and money management, then you can make sweeping improvements to your entire trading processes.

If you’re focused on the signals with the most potential, you’ll be able to learn more about them.

In the world of trading, asset management can be a tricky proposition because it’s been historically difficult for traders to predict market behavior. But we’re working hard to figure it out. Our trading solutions use a diversification trading model to help you understand the probability and risk of every trade. This way you can get to past the “losers” more quickly and remain focused on the important work of improving your trading experience.

May 1, 2019

Erich Senft

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