In order to avoid reacting to price movement during the trading session and prevent us from making impulsive trade, we need to be prepared with various trading parameters and/or patterns to watch for initiating potential trade.
Too many traders believe there is a method that will ensure them with profitable trades. And many believe there are price patterns that will give them profitable trades. But the fact is neither of them exists. For those that have been trading for a while and have achieved some degree of success in trading will tell you the key ingredient for them to become successful in trading is risk management. Sure they all have some favorite setups that they have found to give them the confidence that those setups could result in profitable trades. But that probability is not 100%. To become a successful trader, it is not how accurate one can draw or identify those support and resistance levels, or being able to see those head & shoulder patterns, wedges, flags, etc. Once we put on a trade, we have no control on where the price will go. The only control we have is when to exit our trade. And those exit points are what we have defined in our trading plan, and it is those exit points that will help us define and manage our risk. If you ask many successful traders what is the most difficult thing they have to learn to become successful in trading, and they mostly will answer you “managing risk”. Learning to identify price patterns, potential support and resistance levels is the easy part; the difficult part is how to manage risk (emotion).
In this video, I will present a process that I use for preparing potential trade setups and trade parameters. If you have any questions, please use the contact page to send me your questions or tweet me your question to my twitter account @smtraderCA .
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