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The Smart Trader

Posted by GoodTrader on Mon, 04 Mar 2013 , Add your Comments !
Traders who get more profits from their trading in the markets have certain common characteristics that can be summarized in one sentence: they are smart.

In this post I will talk about the guidelines to follow to be a smart trader.

Be Smart

Avoid Excessively Watch Your Trades

The smart trader is not obsessed with their trades, realizes that he can not control market movements and therefore try not to watch his trades in an addictive way.

After opening a trade does not make much sense to look at the ups and downs of the stock constantly, this only serves to make emotional decisions that lead to failure.

The smart thing is to place the stop loss and take a quick look a few times a day to set the stop when the price moves in favor of the position.

You have to let time passes, allowing the development of the trend. Do not pay attention to short-term fluctuations because it takes time for the price to move from one point to another.

If you feel the need to closely monitor the price movements is that you risk too much money on your trades, reduces the size of your trades and you will feel more relaxed and happy in your trading.

Focus On the Process, Not On the Outcome

The smart trader always tries to improve their methods of trading that is what he can control. Every little improvement is a step to increase profits.

What really matters in trading is to improve the process of trading. A trade may randomly end in profit or loss, but if the trader strictly applies a well designed trading process, after a sufficient number of trades the balance of his activity will be positive.

Profits are the result of making good trades in which the ratio profit / loss of all trades will be in favor of the trader.

Therefore you have to put your efforts in improving the different processes involved in trading such as when to enter, when to exit, position size and risk of the trade to name a few.

Avoid Doing Too Much

The smart trader is not the trader who spends 12 hours a day in front of the screen looking charts and reports. The smart trader is one who applies a proven method efficiently in his trading and spends his valuable time on other activities.

Doing more does not necessarily mean winning more, rather the opposite. Spending too much time to the trading activity is counterproductive and does not add value to the trader.

No matter how much you analyze the markets, you will never be sure what the market is going to do, you will never be 100% sure that the market will go up or go down.

Trading does not work that way, the important thing is not how much you do, but the quality of what you do. You must think of ways to be efficient, to do less and earn more. This is what do the smart traders.

Happy Trading!
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