Essential Trading Skills and Habits

The right habits and skills are essential to have good, consistent results speculating in the markets. The two main reasons for not having the success most traders aim for, you have probably already have heard countless times. The key to success is letting profits run as far as possible on winning trades and cutting losses quickly on losing trades. This must become a conditioned and automatic habit. Instead of cutting losses short and letting profits run, losing traders do the exact opposite. They let losses run or to make matters worse, add to losing positions, and cut profits short on winning trades!

Trading is meant to be joyful and profitable with the disciplined use of a good trading plan and timing approach. It is completely normal and natural to take losses on some trades. This is the main cost of doing business. Risk must be predefined at a small percentage of capital per trade. Most day traders do not risk more than 1 – 2 % per trade. Even with a mediocre trading plan, it is also inevitable to have winning trades. Some of these trades will be big winners if the timing is right and you catch a significant trend change.

Risk per trade: The trade size is determined by the trade set up and how much is at risk based on the correct stop loss placement. If a stop is hit, then maximum loss is no greater than 1 – 2 % of capital, for example.

On winning trades, a trailing stop should be used to let profits run and not give back too much of your profits if the trend begins to change. I recommended scaling out of winning trades and getting in the habit of rewarding yourself on some of the position when you are right, and then moving your stop loss to “break even” to protect your capital. For example, when a trades moves in your favor, taking 1/4 or 1/3 of position off at an initial target to lock in some profits and then moving the stop loss to break even to protect capital. On a new trend is established, using a trailing stop loss to let profits run until higher price targets are reached or a reversal of the trend begins to occur. The cardinal rule is to NEVER let a winning trade turn into a losing trade.

My definition of a winning trade, once the trade moves in your favor, is a trade that never returns to the entry point. The focus is on making good trade entries at the right time. If an opportunity is missed to buy or sell at the best time, then we wait until the next opportunity to buy the pullback or sell the rally. Trading opportunities are like buses. There is always another coming one just around the corner. Our job is to be patient and wait for the best trade set ups and opportunities to unfold, and then strike at the right time.

Good, consistent habits is the key to success in all areas of life. Trading, just like competing in sports, is also psychological. We must be confident, focused, and in the right frame of mind. There are many good books written on trading psychology. My personal favorite which includes the right habits and approaches, is Mark Douglas’ “Trading in the Zone.”

Wishing you the best of success!

T.S. Phillips

For more information on trading servies and market timing reports, you may visit my TRADING SERVICES page.

Copyright © 2020, T.S. Phillips, Astro Advisory Services LLC

Trading Psychology: The main cost of doing business as a Trader

Trading psychology: What is the main cost of doing business as a Trader?

All businesses have costs and expenses for doing business.

So what is the main cost of doing business as a trader?

Commissions? Nope.

Software, education, and real-time data subscriptions?  Nope.

Valuable market research or analysis such as planetary support/resistance levels and timing signals to give you the very best trading and timing advantage?  Nope.

Most of my subscriber’s average daily losing trade is many times greater than my affordable monthly subscription rate.

So what is the main cost of doing business as a trader?  It’s obvious. It’s your trading losses!

Remember, “losing traders think about how much they can make on a trade opportunity; winning traders think about how much they can lose!”

We must accept the fact that there will always be some losing trades and actually feel good when a loss is taken at a predetermined small percentage of capital. It is a normal cost of doing business. Taking a loss frees up capital to take advantage of other opportunities including your mental/emotional capital to allow you to think clearer and be more objective.

Trading can be counter intuitive. “Lose to win” is one of the core concepts to accept. If you haven’t downloaded my free e-book, “5 secrets to maximize trading profits and reduce stress,” go to my homepage and click on the link at the upper right side. You will also receive five follow up mini-lessons for five days regarding these five important concepts.

If you are using a winning trading plan and timing signals that produce a high percentage of winning trades, why should you care if you have to cut losses on some trades that don’t work? It is something that must be done at all times. Just one losing trade that is not managed properly with too much leverage can wipe out all the gains regardless of how great or amazing a trading plan or timing system you are using.

The key is identifying low risk, high probability trade set ups, keeping losses very small, such as no more than 1 – 2 % of capital per trade. Once a trade moves in your favor, take some initial profit at a percentage of the position, move stop loss to B/E, break even, and using a trailing stop loss once a trend is established to “let profits run” until targets are reached or the next turn time or reversal day. These are “essential skills” all experienced traders already know.

I hope you have found these tips helpful.

Daily timing reports are available for the E-Mini S & P, Gold, or Crude Oil. All daily subscribers may switch to any one of these three markets at any time on a monthly subscription.

Weekly timing reports for part time or swing traders are available for the E-Mini, Gold, Silver, Crude Oil, Eur/Usd, T-Bonds, or Bitcoin too. You may also switch to any of these markets covered during your monthly subscription at any time.

For experienced and skilled traders seeking the ultimate timing advantage and trading edge…….

GET STARTED HERE!

Best of trading success,

Ted

© 2017  T.S. Phillips, Astro Advisory Services, LLC

E-book includes some excellent trading psychology tips

Download my latest eBook “5 secrets to maximize trading profits and reduce stress”

It is located on right side at home page.

More “Trading Psychology” articles coming soon in 2017!