My 7 Trading Habits
November 4, 2015 by Steve
1. I trade in the direction of least resistance until the risk/reward ratio becomes skewed against a trend going much further in my favor based on an extension away from a short term moving average or overbought conditions.
2. I risk a small amount of money for the potential to make a lot of money. I manage my position sizing and stop loss level so if I am wrong I only have a small loss.
3. I only trade in markets I have backtested for historical price patterns around moving averages, MACD, and RSI.
4. I like to trade stable instruments like stock indexes and big cap stocks with leverage by using leveraged ETFs and stock options.
5. I only trade in liquid markets so the bid/ask spreads are tight. I do not want built in losses trading is hard enough than to suffer from losses when getting in and getting out of a trade.
6. My time in a trade corresponds to if I am making money or losing money. My losing trades last a about a day while my winning trades can last for weeks and even over a month during a trend.
7. I trade based on the current reality of my position and whether it is right to continue to continue to hold it, I am not biased by my P&L or my entry just the current potential to make or lose money.
