So far we have had some good discussion and some sound suggestions.
But lets look at them a bit closer. Are they the What of profitable trading?
THE TRADING PLAN.
No plan and your like a ship at sea without a rudder.
No point in having a rudder and not knowing where your going.
Even worse when your plotted course ends up to be incorrect.
Without knowing WHAT makes your plan profitable your trading with a Plan that MAYBE profitable NOW but long term could be disasterous or may not be profitable at all..
This is where many are.
They have a plan (read Theory) they have some loose ideas on stops entries,no idea or very little idea on exits (read gut feelings) a handfull of cash and off we go. (sounding Familair?)
Profits are inconsistant---there is a level of anxiety----there is a need to know a desire to be predictive---to have an idea that your plan WILL/COULD/WOULD/SHOULD work tommorow----its often altered and rehashed---when plan "a" "b" or "c" dont perform to expectations.Your constantly on a computer, or ringing for price,pager beeping,mobile alerting (Sounding Familar?)
Does the Plan work---Dunno Ill tell you once Ive traded it!
Or yeh it is now.
Nope plan on its own isnt "THE" answer.
Discipline comes with confidence.
Ask anyone who has a losing streak----any losing streak and see if discipline isnt questioned.
BLIND DISCIPLINE can be extremely dangerous just ask the victims of the George Town massacre.
Purchasers of most Black Box systems.
Nope not Discipline on its own.
Yep weve all heard about it and many have a loose understanding of it.
Means minimising loss------ doesnt it!!? The 2% rule.Why 2% why not 1% or .5% or 4%?
Let your profits run ---- weve all heard that.
But RUN TO WHERE------When should I exit----how do I know--when has it run enough.
Place a stop,Take a profit--- cant lose!! -------------RIGHT!!
Ive got Money Management firmly in place---a sound trading plan (in my mind) and come rain hail and shine IM GONNA BE DISCIPLINED!---cant loose Ive done EVERYTHING.
While there maybe a few of you out there that CURRENTLY are running a profit because the WHAT to your trading is CURRENTLY returning you a profit,(and you dont know what that what is---and its certaintly happening if your making a profit!) unless you KNOW what your WHAT is longterm there is a very very good chance youll at best UNDER perform and at worst die a painfull financial death!
Id say that the vast majority of traders who are short term profitable and dont know what its is (and its not any of the 3 above singularly or COMBINED)---(thats got ya) that has and will maintain profitability will suffer substantially and question their trading as the market or commodity bends and twists as it invariably will.
The WHAT is subtle and Im sure will be argued that its just a part of the above-------and that it is--------- but it IS THE ONLY COMPONENT that GUARENTEES (to the very best of our ability) CONSISTANT PROFITABILITY
Now last chance anyone like to hazard an educated guess.?