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MONEY MANAGEMENT: The MOST Important Aspect of TradingIf you are a professional trader or plan to become one, Money Management is your #1 job. You could be the best chart reader or statement analyzer in the world but if you have poor money management you will still fail. In order to succeed you first have to last, and to last in the trading business you must be able to handle risk and manage it accordingly. How you handle Money Management comes down to a few simple things: Risk limits - This consist of knowing your risk per trade, your max drawdown, and buying power limitations. ○ Risk per trade: This is the amount you are willing to lose if the trade goes against you and stops out (remember to always have a stop loss). Many traders refer to this as Risk Units or simply 'R'. This should be a defined amount that does not vary based on emotion. If you do use different risk for different trades you should have that clearly defined in your trading plan otherwise each trade should be the same. Risk per trade should be around 1% for experienced traders and $10 for new traders as they work towards slowly raising risk with consistency. ○ Max drawdown: This is the max amount you are able to lose per timeframe. For example, a day trader may have a max drawdown of 3R per day, 7R per week, and 13R per month. Max drawdown demands that if you lose that amount in that timeframe you are to be done trading until the next one. This helps traders from spiraling out of control and blowing up a trading account. ○ Buying Power Limitations: Knowing how many trades you are able to take at one time will help define your strategy. Expectations - This consist of knowing your expectancy and timeline ○ Expectancy: Your trade expectancy is the most important stat in all of trading. It tells you what you expect to make per trade. In order to properly manage risk you have to be sure that the strategy is worth it. The expectancy stat is how you do just that. For more info about expectancy check out my post on it here ○ Timeline: Everything takes time. Trading is no different. Having a realistic expectation about your timeline and how much you are going to make is a critical element in helping traders stay focused on their goals and not fall into a get rich quick scheme. If you expect your trading career will take 3-5 years to become profitable you will manage your money much better than someone who expects full time profits in under 1 year. Yourself - This consist of knowing your personality and trading plan ○ Personality: What is your personality like? Are you a jittery person or are you robotic. Knowing this will help build a management that you can trust and are able to follow. ○ Trading Plan: Make sure your trading plan fits your trading style. You have to take many things into consideration here such as time constraints, goals, and personality. It takes time to figure out what works for you. If you can determine how to handle these three factors then you will be well positioned to not struggle with money management. After you have the fundamentals written in your trading plan all it comes down to is staying disciplined and following the rules set for yourself. Clearly define your limits, have an expectation, know thyself. Thanks for reading, follow @Jlaing for more educational post about Money Management, Trading Stats, and more. I also stream a stock day trading chat room every morning at 9:15 EST right here on TradingView, come check it out and say what's up.
BITSTAMP:BTCUSDEducation
by JLaing
How to trade lower tf with Stochastics Real Deal indicatorStochastics Real Deal is one of the most useful and profitable indicators you can find today on Tradingview. After years of researching the ultimate stochastic indicator, i've finally crafted a perfect companion for any trader. This indicator was created for forex 1D timeframe and most people use it this way BUT i can show you how to use it on lower timeframes too! Look at this chart image imgur.com On the left there's 1D timeframe for AUDJPY pair that we take as a reference and bias. If Stochastics Real Deal (SRD) is giving a sell signal like we see in this example, we can go on lower timeframes like 30 min and start scalping the hell out of this pair! On the right there is 30min timeframe AUDJPY. Keeping in mind the sell bias on 1D, we are going to consider only Sell signal for our scalping entries from now on. The sell entry for this indicator is when dots are red and stochastics cross down 80 value. The exit for a scalp will be when stochastics touches or crosses 20. So easy yet so effective! The Stochastics Real Deal is available at the following link, just ask for a trial
Education
by Lollo22
4
CVX - Short term support and resistance1. Fortune_TD, Fortune Banker trend, Fortune Crown stage: 28 Sep 2022, Fortune TD 9 and Force 9 show the trend exhaustion range, the green bar on the previous day shows this is a potential share pull back. . 03 Oct 2022, Fortune Crown red dot reverse from bottom 03 Oct 2022, Fortune Banker trend, green line shows the banker chips flow in from 26 Sep 2022, then short money cross its 5 days average on 03 Oct 2022, potentially a reversal at the bottom. 2. Support and resistance: the support is the lower price of share pull back signal (green bar), at 140.46. The 1st resistance is the gap down on 10 Jun 2022, at 173.65. 4. Summary: Based on above analysis, if the share price hit the resistance 173, and the buy point is 152, short term profit is approximate 11%. If there is no sell signal at the resistance level , then it will develop into main wave. Disclaimer : no recommendation of buy/sell, purely for TA learning and sharing.
NYSE:CVX
by phoenixfre1990
1