Dump it Here

[DaveTrade]

"Trading for Beginners - Skate's Practical Guide to Profitable Trading"
A daily series of posts aimed at those just starting out on their trading journey.

29. The building blocks to successful trading
Three essential building blocks are required for successful trading (1) picking high-quality shares with growth potential and (2) properly exiting those positions on a sell signal and (3) Maintaining the correct mindset.

The first building block is selecting high-quality stocks with significant growth potential, as well as recognising price and volume breakouts using technical analysis and adopting risk management measures to limit exposure to potential losses, which is a critical component of successful trading. It's crucial to remember, though, that every trade involves risk, and there's no guarantee that any particular trade will result in a profit.

The second building block is successful selling. Selling at the proper time is the foundation of profitable trading. Continuous actioning sell signals when they present is not only essential but necessary for successful trading. A defined plan for reversing losses or capturing profits that coincide with your trading objectives and risk tolerance is essential for effective management. A well-defined series of exits can help to mitigate the emotional impact of market volatility leading to more logical decision-making.

The third building block is your mindset. Successful traders have a growth mindset, which means they are always learning and adjusting to changing market conditions. They have a strong work ethic and are prepared to put in the time and effort necessary to succeed. They can also efficiently manage their emotions and retain a positive attitude in the face of hardships and setbacks.

It is critical to grow these building blocks through education, practice, and experience in order to become a good trader. Traders can boost their chances of success and reach their financial goals by creating a strong foundation of information, skills, and mindset.

However, learning these building blocks is a difficult task. It takes commitment, discipline, and hard work. As a result, it is critical to remain motivated and focused to thrive in the trading game. Remember that profitable trading is a journey, not a destination.

Traders must have a combination of gained knowledge and abilities, with a solid trading plan in order to trade successfully. Educational research, risk management, discipline, and emotional control, are among the building components.

It is vital to stay up to date performing extensive research, in order to spot potential trading opportunities. To avoid potential losses, risk management techniques should be implemented, while discipline is required to stick to a trading plan and avoid being misled by emotions such as fear and greed.

To make informed trading decisions, technical analysts discover trends and patterns using precisely defined indicators. Doing so determines if the price is overvalued or undervalued. A well-defined trading plan should include precise rules about when to enter and exit a position. Position sizing, and other risk management techniques, allow traders to learn from their trading results, and adapt their trading strategies accordingly.

Finally, successful trading absolutely requires a dedication to understanding and mastering these essential building blocks. While financial markets can be complex and difficult to handle at times, traders can always improve their chances of success by sticking with their trading plan.

Skate.

Not sure if everyone would agree with you Skate on the number of building blocks or what they would be because there are so many different ways of trading for profit in the markets. I think that the important thing to do is to identify the building blocks in your type of trading and describe them as Skate has done. This process forces you to obtain a clear understanding of your trading method.

 

[rcw1]

"Trading for Beginners - Skate's Practical Guide to Profitable Trading"
A daily series of posts aimed at those just starting out on their trading journey.

29. The building blocks to successful trading
Three essential building blocks are required for successful trading (1) picking high-quality shares with growth potential and (2) properly exiting those positions on a sell signal and (3) Maintaining the correct mindset.

The first building block is selecting high-quality stocks with significant growth potential, as well as recognising price and volume breakouts using technical analysis and adopting risk management measures to limit exposure to potential losses, which is a critical component of successful trading. It's crucial to remember, though, that every trade involves risk, and there's no guarantee that any particular trade will result in a profit.

The second building block is successful selling. Selling at the proper time is the foundation of profitable trading. Continuous actioning sell signals when they present is not only essential but necessary for successful trading. A defined plan for reversing losses or capturing profits that coincide with your trading objectives and risk tolerance is essential for effective management. A well-defined series of exits can help to mitigate the emotional impact of market volatility leading to more logical decision-making.

The third building block is your mindset. Successful traders have a growth mindset, which means they are always learning and adjusting to changing market conditions. They have a strong work ethic and are prepared to put in the time and effort necessary to succeed. They can also efficiently manage their emotions and retain a positive attitude in the face of hardships and setbacks.

It is critical to grow these building blocks through education, practice, and experience in order to become a good trader. Traders can boost their chances of success and reach their financial goals by creating a strong foundation of information, skills, and mindset.

However, learning these building blocks is a difficult task. It takes commitment, discipline, and hard work. As a result, it is critical to remain motivated and focused to thrive in the trading game. Remember that profitable trading is a journey, not a destination.

Traders must have a combination of gained knowledge and abilities, with a solid trading plan in order to trade successfully. Educational research, risk management, discipline, and emotional control, are among the building components.

It is vital to stay up to date performing extensive research, in order to spot potential trading opportunities. To avoid potential losses, risk management techniques should be implemented, while discipline is required to stick to a trading plan and avoid being misled by emotions such as fear and greed.

To make informed trading decisions, technical analysts discover trends and patterns using precisely defined indicators. Doing so determines if the price is overvalued or undervalued. A well-defined trading plan should include precise rules about when to enter and exit a position. Position sizing, and other risk management techniques, allow traders to learn from their trading results, and adapt their trading strategies accordingly.

Finally, successful trading absolutely requires a dedication to understanding and mastering these essential building blocks. While financial markets can be complex and difficult to handle at times, traders can always improve their chances of success by sticking with their trading plan.

Skate.

Good evening
Skate has clearly articulated three key components to trading. 100% spot on. For mine, these three components can be properly executed by way of two constructs. Those new to the game, should get their head across these terminologies:
Trade trend or trade range.

What do they mean?

In layman terms, trade by trend, a trader watches intently to enter early (buy) and holds the position until the trader believes the trend looks like it will reverse or has reversed (sell) cashing in on share price (SP) momentum. Therefore, true trend traders, will buy high and sell higher. Ultimately, it is a strategy aimed at reducing risk, but with this concept brings with it a probative burden to the trader when to enter the market and also when leave the market to maximise profit. The joy of it all.

In layman terms, trade by range, a trader will identify SP highs and lows with trendlines for support and resistance identification. SP consistent highs over periods of time is the resistance level whilst SP low levels over time is deemed a support line. Creditably can be attributed to where these lines are position by the number of time the SP has achieved those levels. This is important because a range trader will trade by repeatedly buying at the support trendline and selling at the resistance trendline until the security breaks on out from a price channel. This concept is also aimed at reducing risk as the trading construct is centered entirely around the notion that price is more likely to bounce around within those levels. Having said that traders must be very mindful of any break outs north and or breakdowns south, where the SP goes through the trader's demarcation lines.

rcw1 has used both contructs, however rcw1 has moved more towards the trade by trend construct. There are a number of reasons why, but this is not for now. I would kindly suggest that newcomers to the trading game research both constructs and have a real good understanding of what they mean and practice with fake money using these constructs. Practice make perfect These are "grass roots" trading methodologies, anyways, for mine.

Have a very nice night and read widely about trade trend or trade range.
Knowledge is power.

Kind regards
rcw1

 

[Skate]

Not sure if everyone would agree with you Skate on the number of building blocks or what they would be because there are so many different ways of trading for profit in the markets. I think that the important thing to do is to identify the building blocks in your type of trading and describe them as Skate has done. This process forces you to obtain a clear understanding of your trading method.

@DaveTrade, I absolutely agree with your viewpoint on the number of building blocks. There are numerous ways to benefit from trading in the markets, and each trader may have their own unique set of building blocks based on their trading style. Identifying and describing the building pieces for your specific trading approach will help you develop a better grasp of your strategy and make better decisions.

You can identify areas for improvement and optimise your technique by breaking down your trading approach into its essential components. This strategy can also assist you in better risk management by identifying any flaws in your approach and taking efforts to minimise them.

In conclusion, while there may not be universal agreement on the quantity or kind of building pieces in trading, identifying and describing the building blocks in your individual trading approach is critical. This will allow you to obtain a better knowledge of your strategy, discover areas for improvement, and eventually improve your profitability and risk management.

Skate.

 

[Skate]

rcw1 has used both contructs, however rcw1 has moved more towards the trade by trend construct. There are a number of reasons why, but this is not for now. I would kindly suggest that newcomers to the trading game research both constructs and have a real good understanding of what they mean and practice with fake money using these constructs.

@rcw1, It's fantastic that you cover two trading concepts, trade trend, and trade range, and encourage newbies to investigate both ways and practice with simulated money (paper trade) to build expertise and comprehension. Trading requires knowledge, and practicing with both concepts can help traders make informed decisions about the method that feels more comfortable to succeed in the markets.

Skate.

 

[Skate]

I'm inspired to share a few general comments after reading the posts by @DaveTrade and @rcw1.
The markets are continuously evolving, and it is critical for traders to investigate different trading strategies and embrace new methods in order to successfully manage risks and maximise rewards. Timing the markets necessitates personal study and analysis, as there are numerous efficient ways available to traders. Continuous learning and seeking out other people's ideas and experiences can provide significant insights into how to enhance trading techniques.

A trading plan is crucial, but finding a profitable trading method is not always easy
To succeed in this game, you must be methodical and consistent. All trading involves trend following, and a trend-following system is a reasonably simple method of system trading that requires little work to manage. The exit rule in trend-following systems is based on some measure of whether the trend has finished, which is a rules-based approach to risk management.

To win at trading
Traders must be adaptable to ever-changing markets and constantly study, and modify their trading methodology. A trend-following strategy with rules-based exits is a dependable approach to risk management and profit maximisation, but it's critical to select a trading method that works for your unique circumstances and stick to it.

Skate.

 

[Skate]

When others have input everyone benefits
I do agree there are many building blocks to successful trading but effective position management is the key to trading successfully. I want to discuss why clever selling is more important than savvy buying in tomorrow's daily posts. I recognise that this may be contrary to the views of others and eagerly await comments. Reading alternative views is how we learn & develop as traders.

Skate.

 

[rcw1]

Not sure if everyone would agree with you Skate on the number of building blocks or what they would be because there are so many different ways of trading for profit in the markets. I think that the important thing to do is to identify the building blocks in your type of trading and describe them as Skate has done. This process forces you to obtain a clear understanding of your trading method.

Good evening DaveTrade,
rcw1 has just seen your post, must have been typing rcw1 response to Skate when you posted. Your comments make allot of sense.

Kind regards
rcw1

 

[rcw1]

When others have input everyone benefits
I do agree there are many building blocks to successful trading but effective position management is the key to trading successfully. I want to discuss why clever selling is more important than savvy buying in tomorrow's daily posts. I recognise that this may be contrary to the views of others and eagerly await comments. Reading alternative views is how we learn & develop as traders.

Skate.

Nice
rcw1 eagerly awaits to read your pending post (s) in relation to this. Always good to pick up tips from other knowledgeable traders.
Have a very nice night.

Kind regards
rcw1

 

[Skate]

"Trading for Beginners - Skate's Practical Guide to Profitable Trading"
A daily series of posts aimed at those just starting out on their trading journey.

30. Shrewd selling makes the money
Effective position management is the key to trading success. When it comes to making profits, it is frequently believed that savvy selling is more crucial than shrewd buying. This means that successful traders prioritise excellent position management over just picking the correct stocks at the appropriate time.

Even experienced traders make poor stock selections, but their ultimate success is decided by how well they manage their positions after they are purchased. Selling winners too early and holding losers too long "will not" result in a positive return. Discipline and the capacity to make difficult decisions, such as reducing losses when necessary or taking profits when the market is favourable, are required for success.

To be successful, you must have a clear precise exit strategy in place, as well as being aware of your psychological biases and trading habits, which can influence your decision-making and market outcomes. Maintaining discipline and concentrating on your trade might assist you in improving your performance and achieving success.

Knowing when to sell is essential for effective trading. While purchasing a stock is simple, determining when to sell it for a profit or loss can be more difficult. Many traders find it difficult to sell a stock because they have an emotional attachment or are afraid of missing out on possible future profits. However, selling is a beneficial tactical tool for risk management and overall performance improvement.

By having a clear exit strategy and regularly monitoring their positions, traders can make informed decisions about when to sell. It is critical to remember that selling is quick and easy, and it can always be reversed if necessary. You can attain market success by successfully managing your positions and making informed decisions about when to sell.

In trading, timing is everything, and it is critical to thoroughly examine your trade timing and to be disciplined in keeping to your trading plan. Greed and anxiousness, for example, can lead to impulsive and irrational decisions, resulting in poor portfolio performance.

It is crucial to consider elements such as position sizing and timing when establishing a solid trading strategy. Proper risk management and position sizing can help to minimise possible losses and maximise returns. Furthermore, keeping up with market trends and news events will help you make better trading selections and boost your chances of success.

Finally, successful trading involves strategic planning, discipline, and the ability to adjust to changing market conditions. Traders can improve their chances of attaining their trading goals and developing a profitable portfolio over time by focusing on these critical aspects and avoiding emotional decision-making.

Skate.

 

[Skate]

An interesting quote from @ducati916's daily post today
The quote recommends readers be open-minded and read materials that arouse their curiosity but abandon them immediately if it's not engaging. This method enables readers to prioritise their time and concentrate on topics that are both useful and interesting.



Skate.

 

[Skate]

"Trading for Beginners - Skate's Practical Guide to Profitable Trading"
A daily series of posts aimed at those just starting out on their trading journey.

I recognise that my series of daily posts are geared at those who are just starting out in the trading world and may lack practical examples of how to put things together. To put my ideas into action and provide complete transparency, I've decided to trade a new strategy "live" in this thread as an example starting off in the new financial year (1st July 2023).

The new technique was initially intended to be a $100,000 portfolio with ten holdings, making it simple to understand the results at a glance. However, after discussing the proposal with my son, he opted to contribute $30k, turning the portfolio into an unusual $130k approach.

The primary aim of conducting this project is to allow people to follow along with actual live trades involving real money. By sharing my trades in this manner, I can demonstrate how easy my trading method is, which takes only a few minutes per week and has few moving parts. Anyone may learn about trading in this manner and see how it works in practice.

Skate.

 

[Skate]

The new "SAP" Strategy
The SAP strategy is the name of my new trading strategy. To maintain complete transparency and integrity, I'd like to explain the strategy's reasoning in basic terms that anyone can comprehend, even if they don't have a technical background.

The SAP approach is built around a series of technical indicators that are used to detect possible buying opportunities. To help determine when to buy, these indicators include factors such as trading volume, price changes, and market trends.

The idea is to find buying opportunities that are consistent with the overall market trend. The SAP method tries to find high-probability trades with a higher likelihood of success by combining technical indicators and filters. I want to ensure that everyone, regardless of background, that everyone understands the logic behind the SAP approach.

Skate.

 

[Skate]

The SPA Strategy
The goal of this strategy is to uncover buying opportunities that have a high probability of success. The SAP trading strategy is a simple yet sophisticated technical approach that employs many indicators to find buying opportunities. It is a methodical way to identify high-probability trades using a combination of technical indicators and filters.

The purchase condition is a key component of the SAP trading method, and it involves multiple technical indicators such as the proportion of buying volume to total volume, in conjunction with my unique “bullish”, and “Ulcer Down” indicators. These criteria are used in conjunction to identify these buying opportunities.

The proportion of buying volume to total volume is a useful metric for identifying periods of accumulation or distribution by market participants. The bullish indicator represents the market's strength, whereas the Ulcer Down indicator monitors the market's downward volatility, which can assist identify possible periods of significant volatility.

Skate.

 

[Skate]

The SPA Strategy
The SAP trading technique additionally employs a buy filter known as the “Percentage up” indicator in addition to those filters, and indicators mentioned in my last post. The Percentage Up Indicator is a Boolean value that has one of two possible values (true or false) that indicates if a given percentage of positions in a watchlist is in an uptrend, which is set to 50% in this strategy.

The “Percentage up” indicator aids in determining the market trend's direction and can be used to confirm other technical signals employed in the SAP strategy. The SAP trading strategy seeks to discover buying opportunities that are consistent with the broader market trend. Overall, the SAP trading technique is a well-rounded approach that uses several indicators and filters to discover buying opportunities. It is a methodical approach that can assist in trading successfully.

Skate.

 

[Skate]

The SAP Strategy
I believe that exhibiting the SAP trading method will assist to relieve the fear that many new traders experience when they first begin trading. I want to demonstrate that trading does not have to be difficult or time-consuming and that it is accessible to those who do not have a lot of money to invest.

I hope to demonstrate how a methodical approach to trading may be effective and profitable by employing the SAP technique. As we move along, I'll describe the technique in greater depth so that everyone understands how it works and why it's beneficial.

Furthermore, while trading always entails some level of risk, the SAP approach is designed to reduce that risk. We can lower our chances of losing money by carefully timing the markets by selecting positions that satisfy particular criteria to restrict possible losses.

Overall, I intend to show that trading can be a viable and accessible means to build wealth and that the SAP strategy is a simple and effective approach that everyone can learn and apply.

Skate.

 

[Skate]

"Trading for Beginners - Skate's Practical Guide to Profitable Trading"
A daily series of posts aimed at those just starting out on their trading journey.

31. Effort and luck in trading
While knowledge and effort are key for trading success, it is also important to recognise that luck can play a large role in determining whether traders win or lose in the market.

Trading success is influenced by a variety of elements, including luck and timing, neither of which can be completely controlled. Traders must accept this unpredictability and concentrate on creating a sound trading strategy and trading plan that contains clear precise rules and guidelines for entering and exiting positions, decreasing risk, and minimising losses.

Traders must have a competent money management system in order to protect capital and maximise profits. Money management requires properly identifying risks and following a trading strategy flawlessly. Profitability also requires a well-defined exit strategy or a series of exit conditions. Traders must also be patient, disciplined, and adaptive in the face of changing market conditions.

Although traders may control many aspects of their trading success, it is critical to recognise that unexpected market circumstances and events can have a big impact on their profitability, making risk an important component to consider.

Unforeseen market events outside a trader's control may inevitably occur, regardless of how knowledgeable or attentive they are. As a result, traders must be mentally ready for any shocks that may arise and recognise that they are effectively "punching bags" for the trading gods.

In essence, successful trading involves taking advantage of price differentials, spotting patterns, and calculating when to enter and exit a position. Traders must have everything working for them in order to be successful, from their trading plan to their risk management and exit strategy.

Resuming trading after a major decline also requires some luck to bring traders back on track. Traders can boost their chances of success by implementing a sound trading strategy and remaining patient, disciplined, and adaptable to changing market conditions.

Good trading results involve both luck and trade expertise. The market is vulnerable to a variety of unanticipated variables, such as abrupt changes in macroeconomic conditions or unexpected news occurrences, where luck plays a critical role in determining whether a trading portfolio's value improves or drops. These uncontrollable events can have a substantial impact on a trader's overall trading performance.

Trading abilities, on the other hand, are essential since successful trading requires the ability to analyse market patterns, devise a strong trading strategy, and execute trades effectively. To maximise earnings while minimising losses, traders must have a thorough understanding of market dynamics, technical analysis, and risk management.

As a result, profitable trading requires a combination of luck and trading ability. While luck might play a factor in a trader's success, traders must also have the skills and expertise to capitalise on opportunities and properly manage risks. Traders can improve their chances of success and produce positive trading outcomes by honing their trading application and being mentally equipped to withstand any obstacles that may arise.

Skate.

 

[Skate]

While the SAP trading method has its pros and disadvantages, it is crucial to remember that no trading strategy can guarantee a profit with any trade taken. Even with the use of technical indicators, filters, and other criteria, market moves will always be unpredictable and unforeseeable.

The SAP method is a technical methodology that uses a combination of indicators and filters to discover high-probability trades. However, there may be times when these indicators and filters miss indications that might have been beneficial. For example, unanticipated price swings can be caused by unexpected news events or changes in market sentiment, which the SAP technique may fail to detect.

Furthermore, while the SAP technique seeks to limit the danger of losing money, trading always involves some risk. Losses can occur even with proper timing and position selection. Traders must have a risk management plan in place and be prepared for probable losses.

To summarise, while the SAP trading method has advantages, it is not infallible and cannot guarantee profits. Traders must be aware of the dangers associated with trading and have a risk management strategy in place.

Skate.

 

[DaveTrade]

"Trading for Beginners - Skate's Practical Guide to Profitable Trading"
A daily series of posts aimed at those just starting out on their trading journey.

31. Effort and luck in trading
While knowledge and effort are key for trading success, it is also important to recognise that luck can play a large role in determining whether traders win or lose in the market.

Trading success is influenced by a variety of elements, including luck and timing, neither of which can be completely controlled. Traders must accept this unpredictability and concentrate on creating a sound trading strategy and trading plan that contains clear precise rules and guidelines for entering and exiting positions, decreasing risk, and minimising losses.

Traders must have a competent money management system in order to protect capital and maximise profits. Money management requires properly identifying risks and following a trading strategy flawlessly. Profitability also requires a well-defined exit strategy or a series of exit conditions. Traders must also be patient, disciplined, and adaptive in the face of changing market conditions.

Although traders may control many aspects of their trading success, it is critical to recognise that unexpected market circumstances and events can have a big impact on their profitability, making risk an important component to consider.

Unforeseen market events outside a trader's control may inevitably occur, regardless of how knowledgeable or attentive they are. As a result, traders must be mentally ready for any shocks that may arise and recognise that they are effectively "punching bags" for the trading gods.

In essence, successful trading involves taking advantage of price differentials, spotting patterns, and calculating when to enter and exit a position. Traders must have everything working for them in order to be successful, from their trading plan to their risk management and exit strategy.

Resuming trading after a major decline also requires some luck to bring traders back on track. Traders can boost their chances of success by implementing a sound trading strategy and remaining patient, disciplined, and adaptable to changing market conditions.

Good trading results involve both luck and trade expertise. The market is vulnerable to a variety of unanticipated variables, such as abrupt changes in macroeconomic conditions or unexpected news occurrences, where luck plays a critical role in determining whether a trading portfolio's value improves or drops. These uncontrollable events can have a substantial impact on a trader's overall trading performance.

Trading abilities, on the other hand, are essential since successful trading requires the ability to analyse market patterns, devise a strong trading strategy, and execute trades effectively. To maximise earnings while minimising losses, traders must have a thorough understanding of market dynamics, technical analysis, and risk management.

As a result, profitable trading requires a combination of luck and trading ability. While luck might play a factor in a trader's success, traders must also have the skills and expertise to capitalise on opportunities and properly manage risks. Traders can improve their chances of success and produce positive trading outcomes by honing their trading application and being mentally equipped to withstand any obstacles that may arise.

Skate.

Some people have a problem with the word 'luck' and I'm one of them, replace the word 'luck' with the phrase 'unforeseen circumstances' and I'd give this post a 'Good Content' rating. Sorry Skate, I know this word has been discussed before and I'd like to see your view on it but I just can't do it.

 

[Skate]

Wikipedia
Luck is the phenomenon that defines the experience of notably positive, negative, or improbable events. That's trading in a nutshell.

@DaveTrade the time limit has passed for corrections. But in my defence the word “luck” is a terminology everyone can associate with. Luck and good fortune can be interchanged and it can mean something different with it placement in a sentence.

Please read my post below
The hyperlink to my post is a real eye opener. I’m glad she is not a member of our community. After reading her comments I can appreciate your point of view.

Dump it Here

Skate's Trading Rules # If positions aren't executed at the open "the position stays open during the day" & purged after the close. Important "Never buy at the market", the position needs to be executed at the "Offer" or not at all. The Buy Rules 1. The "Buy offer" is good for one day only 2...

www.aussiestockforums.com

Skate.

 

[Skate]

The SAP Strategy is intended to supplement the sequence of daily posts by taking into account the emotions of inexperienced traders who may find trading frightening and daunting. The method is only used in ideal market conditions, with 50% of the index advancing for buy signals to be generated. The strategy is scheduled to begin in the new fiscal year, assuming that the buy filter, as well as the buy conditions and parameter settings, are met.

The method implements a multi-stage exit strategy, prioritising swift exits when the trade does not perform as predicted, regardless of profit or loss. This strategy is intended to be selective with its entry in order to avoid long-term losses. In short, it is selective in its entry and quick to exit when the position fails to perform.

Skate.