My Old Notes on Trading II

  • After making a nice push in the morning do not be afraid to stop trading- and if you do decide to trade- pick your spots better and have a real plan instead of doing random trades

  • If you are going to trade a volatile stock like PD, do not protect your PL when you trade or else the risk your taking on is greater than your reward

  • Do not base your trades on news that you read. If the stock shows you otherwise then trade the stock accordingly instead of sticking with a bias. Use the news as a guide but do not base trades on it unless it is confirmed by the stock itself

  • Resist the urge to trade stocks that you have not been carefully watching

  • If you make a good trade in one direction and get out successfully, then try to get back in on the same side and it doesn't work- do not continue to do it- instead, wait for the stock to show you that the trend is continuing and then get involved

  • Use volume as an indicator of overall market activity

  • When volume is lower than usual it means that institutions are not active and stock moves will trend less and have little follow through

  • When volume is lower be quicker to scalp and do not get involved as much because although the futures may be swinging the stocks will not react and it will cause you to write tickets and lose money by paying the spread only causing frustration

  • Track the volume of the stocks you follow for periods of the day- such as how many shares until 11, until 12, etc.

  • On slow days, be quicker to switch to another stock/sector. Don't let pride hurt your trading

  • On slow days, if you get off to a bad start and then make half of it back- take that as a positive and stop trading... However, if the market is active and you get burned early, refocus and carry on trading normally

  • If you lose on your first few trades take a step back and understand what you are doing wrong instead of repeating the same thing over and over

  • Do not flip in between stocks- if you are trading poorly in one, then switch- if you succeed in the new stock do not go back to the other one unless you think you have reevaluated it enough to be able to trade it successfully

  • Do not make trades hoping for a miracle by getting into massive size for no reason

at 11:06 PM
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