[Notes]Trading stocks successfully ten rules of successful trading @Udemy


You purchased this course on Apr. 27, 2016

DISIPLINE : Technical Analysis

rule : risk and money management

safe parameter
comfort zone
no emotions affect ;under controlled

know what to do when the price moves in the right direction ; get out when the price moves against the prediction

1 profit > being right

2 never :add to a losing trade

Hope is not a good trading strategy
Knowing when to take loss is.
[[[ When in doubt ,get out ]]]

3 Be patient with winning trade
set realistic target
safe protective exit point
holding a winning trade
closing losing trade

  • technical analysis
  • levels of support and resistance
  • trend channels
  • moving averages
  • technical indicators : Stochastic Oscillator (stochassitcs)
  • technical indicators : Relatie Strength Index (RSI)
  • technical indicators : Williams %R
  • candlestick patterns : to identify reversal patterns and pullbacks ,which also indicate to enter trades and times to sell and take profit
  • risk /reward ratio stick to trading plan

4.Have a trading plan

  • Trading style : #
  • — Swing trader : #NOWwillTRY $TSLA
  • — Day trader less than a day and often less than an hour : #NOWwillTRY# $PLTR $DOYU
  • — Investor : 2/3 years or more

^ Risk / Reward ratio
risk to take ; reward to expect ;at least 1:3 ,lose 100, to gain 300
protective stop / profit target

^ Entry / Exit points

^ Account size / TIer size
money management

^ Correct position Size
(not larger than)
< 10,000 1/8
10,000 -100,000 1/12
100,000 - 1,000,000 1/16 ex: 240,000 / 16 = 15,000
larger than 1,000,000 1/28

^ Major Indices
remind market trend ,premarketing hours, the tone for the rest of the trading day
Nasdaq 100

^ Sector and Industry Performance
before trading: check how a particular sector or industry is performing
9 major sectors
Sector Select ETFS tracked by the SPDR

  • Materials XLB
  • Energy XLE
  • Finacial XLF
  • Industrials XLI
  • Technology XLK
  • Consumer Staples XLP
  • Utilities XLU
  • Consumer Discretionary XLY
  • Health Care XLV

^ Watch for Earning Reports
suggestion: leave earning trades after 2 or 3 days to buy back

^ Three strikes out

Check plan and know stop loss
stay within comfort zone
when price keep moving down, feel uncomfortable holding, get out
get back in if the price bounce back and moving higher
Three losing trade in a row ,get out the rest of the day

^ Keep trading Journal
data record:

  • entry-exit strategies
  • what was traded
  • how the trade went

verify where trading strategy works and what is needs correction
monitor mental and emotional state, during and after the trade

ask yourself some simple questions ,help you understand what went well and why, as well as what went wrong and why

// as honest as possible without judging or beating yourself up//

  • What was your thought process before you got into the trade
  • did you follow your trading plan before entering , while in the trade ,and after exiting the trade?
  • If you didn’t have a trading plan, why did you trade? Was it an emotional impulse?
  • Why are you in this trade?
  • Why do you think the trade turned out to be a good one?
  • Did you have a good night sleep?Where you rested and well aware of your thoughts?What time was it when you traded?
  • Why do you think the trade turned out to be a bad one
  • Where you tired? Did you skip a meal?Eat too much?What time was it when you traded
  • How could you have done it differently
  • Are you investing in positions that are enriching and benefiting your portfolio
  • Are you reading the chart and trading accordingly or Are you hoping the trade will eventually start working

5.Know what to trade and what not to trade

^ Non-tradeble

  • too expencive ( $AAPL ? )
  • too volatile ( $TSLA?)
  • don’t have enough trading volume
  • large spread
  • stock is trading sideways (not uptrend or downtrend)

famous (oops ,my #FAAMG ,TSLA)
expensive (???)
insufficient trading volume
volume pushes price higher
less than 300,000
excessive trading volume
more than 30,000,000
large bid-ask spread
smaller the spread, the smaller you cost
consider spread between $0.01 and $0.05 .
Avoid larger than $ 0.06 per share

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