By Taro Hideyoshi
Have you ever heard that “the best place to hide a secret is where everyone can see it”? Why? It is because if everyone can see secret, then they do not think it is a secret. This is also true of the trading secrets.
You will see, in the following, that you all know what they are the trading secrets well, but perhaps you do not realize their importance.
The trading secrets
Secret 1 : Cut your losses
The first thing that the new traders must learn in the trading business is to cut losses. It seems easy but believe me, it is harder to accomplish than it seems. Usually, new traders tend to hold the losing trades and exit from the winning trade.
Secret 2 : Let your profit run
In addition to cut your losses when it is time, you also have to let your profits run. If you make plenty of good trades but you exit from the trade too early, you are cutting your profits. To make profits in trading, besides trying to make winning trade as much as you can, you also have to maximize your profits for each winning trades.
Secret 3 : Trade selectivity
You have to learn how to pick only the trade that offers a great opportunity. This takes time since you have got to find the right trading approach for yourself and you have got to narrow your focus on the market.
To do this, you have to decide your methodology and concentrate on what you need. Then you have to become an expert in its application.
Secret 4 : Trade with the trend
Trade with the trend relates to the decision of how to initiate trades. It means you should always trade in the direction of recent price movement.
Trading with the trend is a hard one to do because a stop losses point will be farther away, potentially causing a larger loss if you are wrong. This is why so few traders are successful. They cannot bring themselves to trade in a psychologically difficult way.
That’s it! The secrets in trading success. Too simple and easy? By just following the four basic rules which are the trading secret you will find yourself gaining more profits.
Although they are just the basic rules, it is hard to follow. In order to apply them into your trading, you will need to develop mental discipline and patience to follow the rules.
About the Author
Taro is an experience trader who trades in stocks, futures, forex. He strongly focuses on technical analysis, trading systems and money management.
If you would like to find more articles on MetaStock Tutorials, MetaStock Formulas, Trading Systems and Money Management. Please go to MetaStock Trading System.
You would also find the list of recommended books for trading & investing at The Investing Books.
