Imagine what life is like when you consistently end up on the winning side! We’ve been there for many years now and it’s not by chance. Our tutorial products enable you to learn how to trade successfully and make the step from “retail speculator” to “professional trader”.
To help ensure your chances of success, these seven key recommendations form the background to our technical trading strategy.
To help ensure your chances of success, these seven key recommendations form the background to our technical trading strategy.
You should decide what you are going to trade and stick with it. Learn everything you can about it in as much detail as possible.
#1 - Know Your Market
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Even if you are going to be a purist technical trader, you still need to understand how the different macroeconomic events impact your market so that you are always a step ahead.
We are gold traders and have been for many years. We rarely trade anything else (unless there's an obvious set up which exactly meets our trading rules). We have previously traded the forex and equity markets, but our passion is gold. We know an awful lot about the gold trading market, but there are always new things to learn. |
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Most small traders (i.e. the home-based independent speculators) end up losing money when they trade the financial markets. Academic studies have confirmed that 95% of these traders eventually lose money over time – which is why investment professionals refer to them as “dumb money”.
We’ve all been there at some time in our trading careers. Some initial successes which hook you and then a run of losing trade after trade and not knowing why, or what you need to do to break the cycle…it doesn’t take long until your funds have expired and you feel stupid!
We’ve all been there at some time in our trading careers. Some initial successes which hook you and then a run of losing trade after trade and not knowing why, or what you need to do to break the cycle…it doesn’t take long until your funds have expired and you feel stupid!
Our days are spent, alongside watching the market for trading opportunities, making sure we constantly continue to learn more.
#2 - Plan Each Trade
Don’t make hasty (often costly) decisions without doing your research first. We have a routine where first thing every day we perform a top-down analysis of each charted timeframe for gold and identify;
What is the prevailing trend for each timescale? Where are key support and resistance points? What is our plan for the trading day? What will cause us to change our plan? What news/outside events could move the markets or cause “spikes” in the gold price?
We plan where we are going to buy or sell, where to place our stop losses and most importantly where to exit each trade. Then, once the trade is planned and executed, it is critical that we are totally disciplined – we made the trade for a good reason and with solid justification, therefore any changes or adjustments need equally solid justification.
We plan where we are going to buy or sell, where to place our stop losses and most importantly where to exit each trade. Then, once the trade is planned and executed, it is critical that we are totally disciplined – we made the trade for a good reason and with solid justification, therefore any changes or adjustments need equally solid justification.
We only trade when the odds are stacked in our favour - we have developed a set of rules which trades must abide by that, when present, means we are likely to win. You can learn these rules in our tutorial packages.
#3 - Keep Losses Small & Maximise Winners
This sound obvious, of course, but it’s often traders doing exactly the opposite of this that accelerates them along the path to financial ruin.
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If it’s clear that the trade is going against you, get out quickly. In many cases a trade will go the wrong way at some point – it’s not always possible to pick the perfect entry point and so you need to allow room for the trade to “breathe” as it confirms a bottom/ top or performs a natural retrace after a big move.
However, where it’s clear that market conditions have changed you need to cut your losses and move on to the next trade – this is critical and one of the most difficult disciplines of trading. We have learnt it over many years and our trading products can teach you this discipline too. One thing never, ever do is widen your stop loss in the hope that things will turn around. |
Conversely, when the trade is running the right way, don’t panic and take your profits at the first sign of a rally stalling. Sometimes this makes sense when the market is clearly turning or if you’re initial pre-trade assessment wasn’t accurate - but generally once a strong trending move has been identified and a trade is correctly placed, the strategy should be to keep the trade open and trail your stop loss position to lock in profits and ride the trend for as long as possible.
Our long term average winning trade is $52 (or 520 points) and our average losing trade is $11 (or 110 points) – this difference, coupled with a higher percentage of winning trades than losing trades, is why we are successful traders.
If you want to share in our success, check out our products page and get started on the road to professional trading!
Our long term average winning trade is $52 (or 520 points) and our average losing trade is $11 (or 110 points) – this difference, coupled with a higher percentage of winning trades than losing trades, is why we are successful traders.
If you want to share in our success, check out our products page and get started on the road to professional trading!
#4 - Remove Emotion
To be able to make the key decisions which keep losses small and maximises winning traders you need ice in your veins. There is a tendency to become too emotionally involved with a trade once it has been placed and to want the trade to succeed too much (don’t “fall in love” with a trade!).
Novice traders tend to let losses run too long, by either widening stops or ignoring signals that the trade is going wrong, in a desperate attempt not to lose money.
The inevitable result is when you do eventually have to take a loss, that loss is a huge one.
This means that there is even more pressure to succeed when the next trade is opened - if there even is a next trade….
Removing emotion from trading decisions is a very hard discipline to master, but it gets easier as you become successful. Following a method over the long-term which has paid dividends gives you confidence - when short-term setbacks occur they no longer affect your judgment. Our methodical and disciplined trading and years of experience ensure that we never fall prey to emotional trading mistakes.
Novice traders tend to let losses run too long, by either widening stops or ignoring signals that the trade is going wrong, in a desperate attempt not to lose money.
The inevitable result is when you do eventually have to take a loss, that loss is a huge one.
This means that there is even more pressure to succeed when the next trade is opened - if there even is a next trade….
Removing emotion from trading decisions is a very hard discipline to master, but it gets easier as you become successful. Following a method over the long-term which has paid dividends gives you confidence - when short-term setbacks occur they no longer affect your judgment. Our methodical and disciplined trading and years of experience ensure that we never fall prey to emotional trading mistakes.
#5 - Have A Money-Management Strategy
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Money management is vital to sustained success – many traders risk far too much of their available capital on each trade chasing the “big win” rather than a sustained, gradual and controlled growth through smaller more manageable trades.
Our own proprietary money management strategy has resulted in many years of consistent and steady gains for us. |
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It is also geared in such a way that we will never lose more than we can stand on any single trade.
You need to find the right level that suits your funds, risk appetite, style and frequency of trading – our tutorial packages can help you find the right level of risk for you.
You need to find the right level that suits your funds, risk appetite, style and frequency of trading – our tutorial packages can help you find the right level of risk for you.
#6 - Don't Overtrade
Whilst trading could (and should) be enjoyable, you need to be aware that it is all too easy to get caught up in the excitement of “the gamble”. All too often we see punters placing numerous trades each day or multiple markets, placing far too many trades that haven’t been planned just to get the “buzz” from being in the game.
Overtrading means more money is lost on commissions and spreads and the likelihood of losing is higher as trades are more frequent.
Overtrading means more money is lost on commissions and spreads and the likelihood of losing is higher as trades are more frequent.
#7 - Never Chase A Loss
When we suffer the inevitable losses, we never jump straight back in to the market in an attempt to put things right – it rarely works and, if it does, it’s usually more luck than judgement.
Accept that losses are just as much a part of trading as winning. You need to be able to deal with losses without allowing them to cloud your judgement – we know this is sometimes hard, especially after a run of heavy losses. If you’ve followed the other tips in this article, you shouldn’t be getting too many big losses in the future anyway!
Accept that losses are just as much a part of trading as winning. You need to be able to deal with losses without allowing them to cloud your judgement – we know this is sometimes hard, especially after a run of heavy losses. If you’ve followed the other tips in this article, you shouldn’t be getting too many big losses in the future anyway!
Always step away from the market after a loss and reassess. Regroup, plan your next trade and re-enter only when there is a setup on the table which fits your trading strategy.