(And before anyone loses their shit, I understand that this is a business not a "game", it's just a figure of speech)
I started studying the markets in my free time around July 2018. I dabbled with swing trading stocks on my phone at work then did some forex trading. Those did not work out too well, so here I am. At the start of this year I quit my job to do this full time with the mindset that if I fail I will have to go find a night job. So far the year has been rough, I had some lucky plays and some horrible plays. Very few of them were great setups. Quite recently I have finally been able to put into practice all the big rules that everyone always talks about.
1. Only trade what you understand and when you are comfortable with the setup.
2. Take only the best setups.
3. Cut losses early.
4. Manage position size.
I am only at 4 green days in a row so I am by no means an expert, I consider myself quite the beginner but I am writing this for my own use and if this ends up helping other noobs who are struggling, great! :)
As a brand new trader who has studied a ton and watched experienced traders it was very easy to assume that huge orders were not a big deal, I was not prepared to see my open P/L over $100. Many times I closed orders that were still holding the chart pattern. I closed orders at -$100 that ended up running up +$1000 if I had just stayed in, So I thought next time it pulls back to -$100 all I need to do is hold it longer, well some of these plays never recovered and I closed WAY negative. This is the product of me not understanding position sizing.
By focusing on taking smaller positions I am much more comfortable letting the pattern ride. I still have plenty of work to do. I am writing this right at the time where I am just getting it. I'm Positive I will be going through other rough patches.
I hope this helps someone who is in a similar position as I am. Follow your rules!
GOOD SETUPS + SMART POSITION SIZES = SMALL PROFITS ADD UP!
p.s. I hope this is the proper use for blog posts
Had a great morning trading, went to lunch and totally messed up the afternoon after this blog post. Gotta stay in the zone. And maybe read this post each day
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