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Good Trade - Bad Trade

good trade bad tradeIt's interesting to hear how people define success and failure when it comes to trading.

What constitutes a well thought out disciplined trade? An ill conceived one?

What someone perceives as being a good trade. What someone perceives as being a bad one.

Here are some guidelines that may help you along. But I want you to think about consistency. After all anyone can put their hard earned money on the table and come up with a winning trade every now and then.

Yet few can balance their wins and losses in a way that keeps them in the game over the longer term.

Key variables that come into play align psychology, attitude and ego.

Combine these with risk management, position sizing and discipline.

Which is all then packaged up into methodology, patience and managing your emotions.

So here is a small list of behaviors that are either going to keep you in the game over the longer term, or throw you onto the scrap heap with the majority of traders who have succumbed to the dark side rather than the embracing the light side.

# 1: Successful trades have a strict trading plan that is followed without fail. Unsuccessful trades are made on impulse, gut feel, opinion or ego.

# 2: Successful trades have an exact entry point with position sizing decided before the trade is placed. Unsuccessful trades are made without consideration that you may actually be wrong.

# 3: Successful trades have a predefined loss limit with upside potential unlimited. Unsuccessful trades have open risk parameters and conservative profit targets.

# 4: Successful trades are taken when your strategy triggers the trade. Unsuccessful trades are made when the fear of missing out overrides everything else.

# 5: Successful trades follow your trading plan even during draw downs. Unsuccessful trades try to recover losses quickly.

And remember, price action is everything.

It overrides feelings, financial need, personal opinions and inflated egos.

And above all it overrides greed.

At the end of the day the market owes you nothing!

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