Archive for: November 14, 2006

In layman’s term , perhaps the best definition is that trading strategy is a plan of attack or game plan. We need game plan in all perspective - football matches or any other sports , businesses and so on. Incidentally at point of writing I received a note from Rosalind Gardner , a popular and successful internet marketer about game plan. See how important game plan or strategy is in every aspect of life ?

In trading we need strategies to guide us in our trade execution. Trading is not an instinctive game. Rather , we need to follow a predetermined set of conditions before any final decision or trade execution is made. In the usual case , strategies include some conditions like setup , signals , entry and exit , risk management and so on.

There is no one set of best strategy that fit all traders. I have tried to use a very successful strategy that was developed and used by a trader friend of mine. Surprisingly the end result was a …

I chanced upon this interesting article by Brett N. Steenbarger regarding trading journals.

My belief is that trading is a system , it is a process , just like a manufacturing or factory system. The trading system consists of various components , each of which are interlinked and they are interdependent , just like a car assembly line. My past experience in factory operations tells me that in order for a system to run efficiently and effectively , we need a checklist or a audit system to ensure all compliances are met. Most businesses are adopting the ISO standards for auditing purposes. Because of the Enron scandal , more stringent system like SOX ( Sarbanes Oxley Compliance ) is been implemented in many businesses.

Likewise in trading , I see the need to have a “self check”. As we know trading is a lonely journey. We need to self impose this check. No one is going to audit what we did right or did wrong. Keeping or writing a …

One of the key issues I encountered during my trading journey is information overload , especially during the initial stage of learning. I always felt as tough there were too many opportunities and too many so-called trading gurus , peddling off how-to-make-money with online trading. I believe this is a common problem faced by many beginners too. There are just too many available vehicles to trade … stocks , options , forex , commodities futures ; within which different gurus offer different strategies that they claimed to be world best. I started with the wrong foot , jumping and skipping from learning one thing to another. Eventually I settled down to learn to trade only forex and SP-500 futures. Key reason is the leverage these two trading vehicles provide.

For those who are beginners , considering to learn trading , the advice is to focus on one and only one area. The more information we get the less inclined we will be to act because we will have too many alternatives and , …