How to analyze markets & trade them successfully

3 Pillars of Trading - Psychology, Market analysis & Trading system, Money management.

  1. If one of the pillars goes down, it'll hurt you
  2. If you can't stick with it, it's no use.
  3. String of losses + poor money management = destroyed account

How to keep your emotion in check.

  1. you may have to spend just as much time analyzing yourself as you spend on analyzing the markets
  2. adopt a probabilistic mindset
  3. be realistic
  4. keep a diary of your trades
  5. setup rules before entering
  6. how to exit the trade
  7. if poor performance then stop trading
  8. don't count money
  9. practice sound money management.

One indicator to rule them all (nope)

  1. Exponential is better than normal averages
  2. watch related markets
  3. need a bigger fishing rod to catch bigger fish
  4. start with few indicators, add more of them when you are comfortable

The triple screen trading system

  1. Market tide - weekly macd
  2. Market wave - oscillator 2 day exponential
  3. intraday breakout

Weekly trend - Daily Trend - action         - order

up                    - up                - stand aside - nothing

up                    - down           - go long        - trailing buy stop

down               - down           - stand aside  - nothing

down               - up                - go short       - trailing sell stop

Money management 101

Survival - never risk more than 2% of equity

  1. Account $10000 then the max risk is 2% which is $200 share bought 20 (max) lower stop no
  2. Steady returns - enforce with a stop loss
  3. high returns - move to stop in your direction