Three T to be speculators: trade plans, trade sheets, and trade journals. Without hesitation, if you want to develop trade into an avocation or you want to increase your demo trade, or you want to trade to make a living, you cannot ignore one of these three tools. This is especially true for your demo account, paper-, or your trading. Utilizing these three tools effectively makes your daily trades smoother.
First Tool: Trade Plan
You want to ask yourself as many questions as possible when developing a trade plan. Here are five quick questions to start your trade plan.
The first question that you must ask yourself is: What market do I want to exchange?
How you answer this question will ultimately determine your long life in trade. There are many factors that determine which market is most suitable for you. Do you want to trade a very volatile market or low volatility market? Do you live on the west coast where it is difficult to see the opening bell 5 in the morning for several markets? Do you travel frequently and you can’t stare at your screen all day? The market or market you choose to trade best in accordance with your lifestyle.
It’s also the best to choose only two to three markets that you want to trade. It’s hard to understand and trade the ins and outs of each market available. While technical analysis can be applied throughout the board, as a specialist, you begin to understand what actually makes specific market fleas. You can then manage your money and trade in accordance with the rhythm on the market. By focusing on a handful of markets, you can become specialists. Without doubt specialists in any field tend to be a better rate.
The second question that you must ask yourself is: What do I trade?
Know why you trade stocks, futures, forex, and options are very important. Is it for fun, like a gambler, or is it a true desire to speculate? Or are you trying “hedge” overall your investment portfolio? What is forgotten by many investors about trading markets such as futures and forex is that there are two aspects for it. This can be the most risky investment and the most risky investment at the same time, if you use it correctly.
For example, during a dot-com bubble, many investors have mutual funds and stocks that are very suitable for Nasdaq 100. When the market starts to slow down and investors find themselves in a precarious position do not know whether they must liquidate their technology stock and investment portfolio, they can only Use Futures Nasdaq to protect yourself from the value value.
By looking at futures from both sides, speculating and hedging, you can find a more flexible strategy to manage your money for the long term.
This guides us to question three to five: What do I jump on / for?
These questions are designed to make you think outside the box as a trader. Look at how your current investment is linked to fluctuations in interest rates, S & P 500, or the average Dow Jones industry. Calculate how much you have to lose when these markets move against you, and from there you can find out the best way to hedge. None of these markets operate in a vacuum; There is a way for you to protect yourself from stock market trouble if you open your eyes to the side of the hedging futures and forex investment.
Tool Second Trade Worksheet:
Trading worksheets are designed to break down whatever trade number you plan to be executed before you enter it. It is designed to ask a number of fundamental questions. After these questions are answered, you can see black and white what are the potential benefits, what is the potential loss, and if the trade is feasible at all.