Random Trading/Investing Tips - Part 1

Flexibility

Being open to any possible outcome is embracing uncertainty. Anything can happen in the market at any time. The minute you cling to a certain outcome is the minute you become fragile as a market participant. Instead of thinking of all the reasons why the trade will work out, think of the reasons why it won't work out. You will usually arrive at the right decision after that. Be flexible and look at all the possible scenarios that can play out so you can make a rational decision. This is especially important when you are in a trade. Do not attach yourself to the trade and turn a blind eye when price is telling you a different story.

Structure

If you don't have a structure that you are trading within then you are just gambling. Anyone can make a great investment or put on a great trade. But not a lot of people can do it consistently. Trading within a set of rules allows you to be disciplined and follow a system that is proven to give you an edge in the long run. Without predetermined rules that guide you through whatever the market throws at you, you are subject to your thoughts and emotions at that moment. And we all know how that usually ends up.

Conviction

This might be contradicting the first point but my best trades are always the ones I have high conviction about. I let my intuition guide me and double down when I am super confident about a trade. At the end of the day, 80% of your profits will come from 20% of your trades. Doubling down when you have a high probability scenario in front of you is what will take you to the next level. When you get dealt an 11 in blackjack, you double the fuck down.

Price Behaviour

Studying the movement of price is the foundation of technical analysis. I'm not talking about a head & shoulders pattern, a break out formation or even the hundreds of lagging indicators that many people use to make sense of price. I am talking about the behaviour of price. How is price forming the head & shoulders? How is price breaking out of the zone? Is it moving with momentum without any corrections or is it slowly moving up with lots of retests? How price is moving towards an area will tell you how it will most likely move away from that area. If price shoots up with momentum to break a zone then it will most likely rip back down in the same way. If price is going up with a lot of corrections then it is creating traffic for the way back so it will probably be a slow move back down as well. Knowing these little nuances from years of experience is what will separate you from the rest of the crowd.

Take Profit

There's a difference between holding a trade because you think it will hit a specific target or when you hold a trade because you want a certain amount of money. Have predetermined take profit rules. Know when you stay in a trade for irrational reasons. Assess the risk to reward of holding and closing. Knowing when to get out of a trade is just as important as knowing when to get in one. No one ever went broke taking profit.