Everywhere a new trader goes the sounds of cute little trading proverbs fill the air. They are the rules that all good little boy and girl traders should follow if they want to be rich and famous when they grow up. Rules like 'The trend is your friend' or 'Let the winners run and cut the losers short'. Well, those sayings don't make any sense and I'll show you why.
We will tackle one adage at a time and expose them all systematically.
First up is the biggest trading lie of all time: "The Trend is your Friend". Perhaps it's your friend, but
The Trend Is NOT MY friend.
My trading system relies heavily on hedged positions and is based on rules that run contrary to most of what I hear and read. It takes a diffent mind set than trend based sytems and that's the main reason for this discussion. If you're interested in range trading with hedges you need a different thought process to be profitable and it may be a good idea to discard conventional wisdom that is reinforced by such phrases like let your winners run and cut losers short.
I'm satisfied with what I've learned about trends so far and want to thank everyone for your contributions. If you wish to discuss trends further please start another thread.
Perhaps you've heard a phrase about trading that you'd like to discuss or perhaps you'd like to discuss one of the phrases I've listed below.
We will tackle one adage at a time and expose them all systematically.
First up is the biggest trading lie of all time: "The Trend is your Friend". Perhaps it's your friend, but
The Trend Is NOT MY friend.
My trading system relies heavily on hedged positions and is based on rules that run contrary to most of what I hear and read. It takes a diffent mind set than trend based sytems and that's the main reason for this discussion. If you're interested in range trading with hedges you need a different thought process to be profitable and it may be a good idea to discard conventional wisdom that is reinforced by such phrases like let your winners run and cut losers short.
I'm satisfied with what I've learned about trends so far and want to thank everyone for your contributions. If you wish to discuss trends further please start another thread.
Perhaps you've heard a phrase about trading that you'd like to discuss or perhaps you'd like to discuss one of the phrases I've listed below.
- Let your winners run and cut losers short
- Don't Marry your positions
- Don't trade against the MAJOR Trend
- Always use tight stop losses
- Expect many losing trades and a few BIG winners
- Choose order entries and exits carefully
- Place order entries and exits near major areas of support and resistance
- Don't pay attension to guys with names like Micro-bla bla bla
- Don't trade if you don't see a trend