Lessons from successful traders
by trader_dante
I'm in the fortunate position of being in contact with several extremely successful traders. We are talking about those that are consistently taking several hundred thousand pounds per week out of the markets and also those that have, in the past, made many millions from trading. I would like to pass on a few tips - or pointers - that they have told me. What you make of them or how you interpret them is up to you - I will simply relate them as they have been related to me.
1. If you are bearish, do not be afraid to pay down.
Sell on signs of weakness. It takes guts to sell when price has already fallen considerably. The opposite applies for bullishness. Buy on signs of strength.
2. Double tops and bottoms can be very profitable opportunities
Sell at double tops and buy at double bottoms AS they form. These are potentially very profitable opportunities and you can trade them with tight stops.
3. Act on intuition
Intuition comes from studying the market and watching it over a long period of time. If you get a strong feeling about a market - even if you are not sure completely why - act on it. But know that feelings can be wrong and be quick to act if the market does not confirm your intuition.
4. There is no such thing as a price that is too high or a price that is too low.
The market is never too high or too low.
5. Have guts when a position goes onside
There is little point in calling a top or a bottom only to take a few points. You have to be able to hold a position.
6. Fading moves can be very profitable but there is no room for stubborness
When a price is at extremes and you want to attempt to fade it, take small positions and be prepared to act quickly to cut your losses if price does not turn. Look for areas where the market last found it hard to get above/below. Look carefully at the price action. Is it stalling? Remember that there is no room for stubborness in the market.
7. Look for clues
The market almost always tips its hand to which way it is going. If you can't see this, you haven't watched it long enough.
8. Remember why you got in.
If you are position trading a market and you are, for example, buying a considerable distance above support, then that last support is the reason for entry. Until that is invalidated, your trade reason still stands. The "market" knows or cares nothing of where your break even point or fixed trailing stop is. These two latter terms, if based on monetary concerns (not wanting to lose, wanting to protect profits) rather than based on technicals (keeping a valid s/r level between you and the price) are useless.
9. Support/Resistance is the key to the market
This is one of the only technicals that the professionals keep coming back too. Where are the support and resistance points? To determine their validity, watch the strength of the price at them.
10. See the bigger picture
You have to have the ability to see the bigger picture. Where are we on the higher timeframes? How much room do we have to move?
11. Get involved
Invariably, those that make big money, get involved. You need to live and breathe your market to make money consistently. Watch it as much as you can. Time spent watching is time spent learning.
12. Fundamentals
Fundamentals are useful but remember that how a market should react and how it does react are two very, very different things. Don't get married to a fundamental opinion if the price does not confirm it.
by trader_dante
I'm in the fortunate position of being in contact with several extremely successful traders. We are talking about those that are consistently taking several hundred thousand pounds per week out of the markets and also those that have, in the past, made many millions from trading. I would like to pass on a few tips - or pointers - that they have told me. What you make of them or how you interpret them is up to you - I will simply relate them as they have been related to me.
1. If you are bearish, do not be afraid to pay down.
Sell on signs of weakness. It takes guts to sell when price has already fallen considerably. The opposite applies for bullishness. Buy on signs of strength.
2. Double tops and bottoms can be very profitable opportunities
Sell at double tops and buy at double bottoms AS they form. These are potentially very profitable opportunities and you can trade them with tight stops.
3. Act on intuition
Intuition comes from studying the market and watching it over a long period of time. If you get a strong feeling about a market - even if you are not sure completely why - act on it. But know that feelings can be wrong and be quick to act if the market does not confirm your intuition.
4. There is no such thing as a price that is too high or a price that is too low.
The market is never too high or too low.
5. Have guts when a position goes onside
There is little point in calling a top or a bottom only to take a few points. You have to be able to hold a position.
6. Fading moves can be very profitable but there is no room for stubborness
When a price is at extremes and you want to attempt to fade it, take small positions and be prepared to act quickly to cut your losses if price does not turn. Look for areas where the market last found it hard to get above/below. Look carefully at the price action. Is it stalling? Remember that there is no room for stubborness in the market.
7. Look for clues
The market almost always tips its hand to which way it is going. If you can't see this, you haven't watched it long enough.
8. Remember why you got in.
If you are position trading a market and you are, for example, buying a considerable distance above support, then that last support is the reason for entry. Until that is invalidated, your trade reason still stands. The "market" knows or cares nothing of where your break even point or fixed trailing stop is. These two latter terms, if based on monetary concerns (not wanting to lose, wanting to protect profits) rather than based on technicals (keeping a valid s/r level between you and the price) are useless.
9. Support/Resistance is the key to the market
This is one of the only technicals that the professionals keep coming back too. Where are the support and resistance points? To determine their validity, watch the strength of the price at them.
10. See the bigger picture
You have to have the ability to see the bigger picture. Where are we on the higher timeframes? How much room do we have to move?
11. Get involved
Invariably, those that make big money, get involved. You need to live and breathe your market to make money consistently. Watch it as much as you can. Time spent watching is time spent learning.
12. Fundamentals
Fundamentals are useful but remember that how a market should react and how it does react are two very, very different things. Don't get married to a fundamental opinion if the price does not confirm it.
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
1
