Trading pillars are most important must before you make any investing or trading decision.
Have you ever wondered what differentiates successful traders from struggling traders?
Having a crystal clear thought process differentiates them from other traders.
Being aware of risk and profit potential is the real difference.
Top 3 Trading Pillars For All Investment And Trading Strategies
Yes these 3 trading pillars are the most important essentials of trading and investment.
Lets assume that you are sitting on a cylinder which is about to burst.
You have a key,which can stop cylinder from bursting.
Given two options i.e
a)Use the key and save yourself
b)Let the cylinder burst-Am ready for consiquences
Which one would you choose from the above given two options?
If you are not out of your mind than obviously option 1.
Same way when it comes to trading and investment decisions,that key is stop loss.
Stop loss will save your capital from being blown up.
You can also view our stop loss guide .
Before you take any kind of trading decisions beware of your stop loss first.
Learn more about stop loss strategy.
Know how to use stop loss in trading for better results.
Entry And Target-Your Must Have Trading Pillars
Your trading entry should not be immediate.
What do you think i mean by that?
That simply means you should have pre determined entry price.
Not just jumping into trades due to excitement.
It should be pre-planned for every trading/investing decisions you make.
And why not pre-planned?
When its about your finances you should be very professionals.
And as a professional you will plan your entry exit and stop loss before you make a decisions.
For entry there are various trading strategies for you.
Every time you get into a trade you need to log your trades.
Maintaining your trade logs/tracking your trades will help you grow as a better trader.
If your strategy is not good you can fine tune it.
Now lets see last trading pillar i.e. Target
If you don’t know your potential target how will you identify risk reward in a trade?
You will book profits completely or book partial profits when your target is reached.
So to take a trading decision you need to have stop loss,entry and target price.
If any one of those is missing than you are taking a wrong trade.
Your risk management is you key.
Go to second chapter of day trading- Your index direction