So how do we manage this lack of control?
We focus on what we can control, like the setup we will trade or how much we will risk. When you start focusing on these control elements, you will find your trading will improve. Yes, we can't control the stock price, but over time you will find the control elements are what make you profitable. I have called risk management the golden rule of swing trading. It is something we have power over, and over time smart risk management will protect your account from whatever the market tries to do to you.
Here are some important control elements:
- your attitude
- amount risked
- stop or maximum loss
- target or expected win
- entry level
- setup traded
- time frame for a trade
- position size for a trade
- trade journal and records
- your watchlist
- what news events are important
- news sources you follow
- bloggers and tweeters you follow
- trading tools you use
These are just a few of the control elements that power your trading goals and profits. It is what you need to focus on in 2015. You will focus on the PROCESS that you can CONTROL.
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