Category: Tips / Psychology / General

A written out trading plan is good. Having a written trading plan that you know has an edge is great. Having a written out trading plan with an edge which was backtested is even better. But will such a trading plan (written + backtested + proven edge) be enough to trade successfully? 

The following is an excerpt from a chapter called Stick to your Guns from the book “Technical Analysis of Stock Trends” which was written by Robert D. Edwards and John Magee:

As traders markets will often frustrate us. This is normal and especially so in the beginning of a trader’s journey. If you stay in the game long enough and are serious about trading, you will eventually find ways on how to deal with them.

I first touched on this concept of R in this post where I gave a simple exercise to hopefully help traders out there to stick to their trading strategies. I realised then that this defining of risk and profits in terms of R might come up in some future posts again, and so decided to write this post on it to explain it a bit better. Let’s start.

Let’s say that you have been trading for a while. Let’s say that  your results have been less than stellar and that this is because of problems that show up when you are trading. These problems could be a combination of any of the ones that I’m going to list below.

To make money in combination with freedom to work from anywhere, being your own boss  and being able to do anything that you want, when you want is some of the main reasons why people get into the trading game; at least initially. But in this post I want to point out some other benefits (non monetary) that trading offers, that can actually improve you as a person. That’s if you stick to trading long enough. Sometimes it happens without you even realising it.

For those traders that are just starting out, you are probably already on the quest to find the holy grail of trading strategies. And for those traders that have been trading for a while and are sticking to / trying to stick to their trading strategy realized that there is no holy grail trading strategy. As many traders are struggling to stick to their trading strategy, I will try by using simple examples from businesses to explain why it’s important to stick to your trading strategy and why it makes sense to do so. Let’s start.

In today’s post I will explore Profit / Loss Ratio, Win / Loss Ratio, Win – Rate and Risk / Reward Ratio, and how they could aid you in your trading.

When I started getting interested in mindfulness a couple of years ago, I did my fair share of reading up on it; and in doing so I came across the RAIN method: a method that I feel might be of use to some traders. The RAIN method is what this post is about.

If you trade long enough, you will notice ego being talked about a lot, whether it’s through trading blogs, podcasts, videos or books; ego will pop up. You might even start to ponder if your ego (we all have egos) poses a problem to your trading and so you might try to find out more on it like I did. Ego and trading is what I’m going to write about in today’s post.