If you have made a trading mistake, then you must take the necessary strategy to insure the mistake is not repeated. There are not many different mistakes that you can make so make the commitment to learn how to recognize them and correct them immediately.
Here is a good effective strategy that will help you stay unemotional in the market: First, when you take a trade, make sure that it is based on your trading method and that you are not violating any trading rules. Next is to be prepared mentally for the worst-case scenario (getting stopped out) by accepting the loss already in your mind as you enter each trade. By accepting the possible loss, the fear of being stopped out is removed and, since there is nothing else to fear, you can then trade with total logic and no emotion.
Since trading is 90% a mental exercise, getting into the proper mindset erases the emotion and lets the logic do its work. The best mindset is to truly feel positive and good a few stop out (as long because it wasn't the results of a mistake) because it means you did your job correctly and cut your loss short and now that trade is behind you.
There is another consideration that's somewhat the reverse of losing. Sometimes traders experience a period of extended winnings and this causes them to become overconfident and begin taking wild risks and abandoning their rules. This is not to be confused with trading aggressively. You can be aggressive and still trade by your rules. But senseless risk taking may be a common story you hear of individuals who were once winners but went home with empty pockets.
Money Management
Always make certain to put a protective stop loss order immediately after entering the market. Having an actual protective stop loss order, in the market should not allow a substantial loss in a single trade.
As a rule, you should never risk more than 5% of your trading capital in any single trade.
The best way of doing this type of day trading is by setting a weekly goal. If you set a weekly goal such as 100 pips, which is way below the weekly average result, it becomes easy to achieve that very reasonable goal on a consistent basis.
As you start experiencing the consistency in achieving your weekly profit goals, you will want to inevitably increase your weekly profit goals. The best way to do this is to add more lots based on the money management concept explained below. Trying to trade more to make more points in order to increase the profit, is not the right way.
The best way to manage your trading capital and risk is to base it upon your results. As you begin trading with one mini contract, withdraw some percentage of your profit to reward yourself and leave the remainder in your trading account. The percentages will vary depending upon your needs. As you are rewarding yourself, you are also building up your trading capital to the point where you have enough margin to add one more contract to your trades. (Remember, just because you have the margin to trade more contracts, you should NOT allow yourself to violate the 5% capital risk rule).
We cannot over emphasize the importance of never trading with capital that you cannot afford to lose.
Methodology
Trade and learn powerful methodology. Attend live training webinar each month. You may also consider one-on-one training. Never hesitate to email me to a veteran and knowledgeable if you are having a problem understanding trades. Just remember that you should generate at least four weeks of profitable trading in simulation first before actual trading. Otherwise, your chance of success will be close to zero.
Please notify us by sending me an email when your 30 days of success is achieved. I am always happy to hear about your progress.
Good Luck and Happy Trading!
