Trading is a tough profession, its as tough as nail that it can took you years of frustrations and constantly losing money if you dont fully understand and wont give emphasis on these three important aspects of trading, in fact it is considered to be the foundation in becoming a consistent profitable trader.In order for a trader to be successful he or she must know the importance and relevance to each one of the three.
Trading Strategy - basically it is a set of rules that a trader must consistently follow so that he can be profitable in a span of time.It can be composed of a combination of indicators, patterns or price action technique.
Risk Management - Trading is all about dealing with money and it is just right that we have to control the risk on every trade so that we can always have much better chance of survival and recover our losses. Most newbies and struggling traders does not give much emphasis about this aspect, it is a fact that market gives us random results regardless of how good our strategy will be, so if we risk more their is a big possibility that you will be hit by a series of losing trades that can eat up your capital easily if you risk big in your trading.
Trading Psychology - A trader can have the best strategy in the world, but if he cannot handle his emotions or the pressure during trading it is impossible for him to be successful, trading will be more successful if we trade without emotions but as humans it is very hard if not impossible to suppress or ignore emotions during trading, that is why majority of traders failed because they just cannot consistently control their emotions during trading, most professional consider trading psychology is much more important than those two mentioned.
Each and every aspect has its own importance and a trader cannot succeed if either any of them is missing.
No comments:
Post a Comment