Thursday, April 19, 2012

Lessons learned

Lessons learned so far. As time goes by, I hope to expand this list.

  1. Respect first support / resistance areas. Set possible TP here.
  2. Remain faithful to your original order setup (SL and TP), especially if they have been well thought-out. Avoid impulse trading. Exception: release of big news
  3. Do not overtrade. Trade quality setups only.
  4. Entering at the end of a retracement presents the best opportunity to maximise R:R and probability. 
  5. Do your own homework
  6. Question EVERYTHING, even if it comes from Dr. Alexander Elder (i.e. the 2% rule)
  7. Use context-sensitive, self-adjusting rules rather than hard, arbitrary rules
  8. Equity curve growth rate is influenced by profit factor, equity risk % and frequency of trades.

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