Good Trades Vs Good Results

[Della Peters]

Why is it that sometimes you see the perfect set-up, time your entry
perfectly, manage your position size and stops and yet still end up
losing money? Other times you can buy a stock on a hunch and find the
company whose stock you just bought announces they are being taken
over at a huge premium.
So is it all about the money, was the first one a bad trade and the
second one a good trade? If not what is it that constitutes a "good
trade?" We are here to make money, so trades that make money are
definitely good! However unless we can do it consistently and make
more than we lose, we will never be a profitable trader.
For this reason you should not be tempted to define your trades solely
on results. In fact, I will say that a "good trade" can be declared
regardless of your results!
Now you might be shaking your head at this point. The problem with
viewing good trades as solely being those that made you money is that
this is actually out of your hands. As an analogy consider a game of
poker when you are dealt a pair of Aces. Now if you could get you
opponent all-in before the flop with this hand, it would be considered
good play wouldn't it?
However imagine your opponent has a pair of Jacks and hits another
Jack on the river to beat you. Does this suddenly mean that your play
to get them all-in was bad? Of course not
You should always plan your trade based on the probability it will
make money and know what you will do in the foreseeable circumstances
and act on it. Thus when you enter a trade you must have a game plan.
You then need to manage your trade along the way. When conditions
change you must adjust.
Seeing every twist and turn before they happen is not a requirement
for good trading. What you have to do is evaluate the situation as it
unfolds, and make the necessary adjustments to your stop loss levels
or price targets to the best of your ability.
The market does not care what you think it should do, it will do it
anyway. If you do not react and adapt, then it becomes a bad trade.
Sometimes the market will leave you with a smaller gain than you
originally thought, or even a loss, but as long as the method you used
was solid this is not an issue.
The old adage about a small loss being a good loss is true. You should
pat yourself on the back when you take a loss if it is the right thing
to do, in the same way as you would if you took a profit in the right
way for your system.
Imagine that you are the pilot of your trade. You know where you want
to go and navigate towards that goal. However should a storm be raging
over your choice of destination then you must make a safe landing at
another airport. Exiting your trade at a spot not originally planned
does not mean your choice was flawed.
It is important to remember that if the set-up was good at the outset,
then taking the trade was the right thing to do, regardless of whether
you get stopped out for a loss or if you realize a huge gain.
If you are doing that, then you are making good trades regardless of
an individual result. Good results come from good trades. Making good
trades is not only which trades you choose to enter, but also how you
manage each trade.
So when you review your trades, as you should periodically, you should
review them from the point of view of whether you did the right thing
at each step - Was the entry good? Did you keep a level head? Did you
panic sell or not sell when you should have? Over the long run, were
you approximately right on the potential profit you could get from a
trade?
As long as you are making your decisions objectively and taking the
what is objectively likely to be the best course of action then you
are making good trades and good results will follow.
Trade well out there!

Stock Market Index Secret Trading Method: http://www.stgetview.tk/