One Trade at a Time
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During the day, while you are monitoring three real-time trading
candidates, you are waiting for one of the three to give you the best
entry signal. Once you have entered a trade on security A, stay with
that trade. If security B gives you a strong entry signal, and it looks
like B has more profit potential than A, exit your first trade and take
the profit. Don't make the mistake of having several positions open
at one time. When you are in a trade, you need 100 percent of your focus on that specific trade. You cannot manage more than one
trade at a time and react quickly enough to market dynamics. Even
though you have computer alerts, and your ego tells you that you
can react fast enough, don't do it. One of the most common mistakes
I witness traders making is getting greedy and taking multiple
positions, thus fragmenting their focus. The worst offender is the
trader who enters one position long and simultaneously shorts
another. Any profit he or she made on one position is canceled out
by the loss on the other. If you fragment your focus most of the time,
both trades end up losers. Remember, you make money one trade
at a time.
How many trades should a high-probability, high-profitability
trader consider when using the more conservative approach? How
many trades indicate overtrading? Let's take a look at how the
answers to these questions impact short-term trading.
During the day, while you are monitoring three real-time trading
candidates, you are waiting for one of the three to give you the best
entry signal. Once you have entered a trade on security A, stay with
that trade. If security B gives you a strong entry signal, and it looks
like B has more profit potential than A, exit your first trade and take
the profit. Don't make the mistake of having several positions open
at one time. When you are in a trade, you need 100 percent of your focus on that specific trade. You cannot manage more than one
trade at a time and react quickly enough to market dynamics. Even
though you have computer alerts, and your ego tells you that you
can react fast enough, don't do it. One of the most common mistakes
I witness traders making is getting greedy and taking multiple
positions, thus fragmenting their focus. The worst offender is the
trader who enters one position long and simultaneously shorts
another. Any profit he or she made on one position is canceled out
by the loss on the other. If you fragment your focus most of the time,
both trades end up losers. Remember, you make money one trade
at a time.
How many trades should a high-probability, high-profitability
trader consider when using the more conservative approach? How
many trades indicate overtrading? Let's take a look at how the
answers to these questions impact short-term trading.