The Triple T Series. These powerful tips and tactics will help your portfolios, and trading accounts no matter which market cycle you may need to use them in.
- Enter and scale into your positions. Use partial entries and exits
Ever had a position that kept running in your favor after you exited? Or maybe it was the opposite; you watched all your profits slowly erode because you continued to hold, believing the asset to go higher and higher.
This tactic will help solve this problem. Leave a % available to ride higher. You can always enter the same position again at any time.
- Understand your timeframe.
You need to understand how long you plan to hold a position. Are you on a 5-minute chart? 1-hour chart? Perhaps you've been trying to trade on the four hour, daily, or even higher timeframes? Once you identify how long you plan to hold a position, one strategy I find useful is to start with longer timeframes and work your way down chart by chart in descending order. For example, you begin with the weekly, 3 Day, 1 Day, 12h, 4h, etc..
This tactic will paint a clear picture of the market you are trading and allows you to enter on the lower timeframes based on your holding time.
- The truth behind a stop-loss.
A stop-loss is an ambiguous trading tool. Article after article will tell you the same thing. In its pure form, a stop-loss is designed to exit your position and reduce your losses in the case of a drastic downturn.
In a perfect world, it should do just that. However, in reality it is not so simple. Stop-losses do not always work as anticipated or designed, especially in illiquid markets and larger capital sizes. The tool comes in all shapes and sizes and impact every trader differently.
Are you always getting stopped out? Is the market running in your direction right after the exit? The problem is that your entry is terrible.
I could go on and on, and this is why stop losses are an art. It applies to everyone differently. The best solution is to lower your position size until you gain a feel for the methods that can work for you. There are numerous tactics I will discuss in greater detail in another issue:
And more, you can even create your own. Do not get stuck in a rigid mindset.
- Slow down.
With the advent of Twitter alerts and hype stocks, novice traders often feel internal pressure to sell out of every position and chase the next significant market move. Chances are, if you are finding out about something through avenues like Twitter then you are late to the party; traders have already made their trade. Instead, why not have a conviction in something you believe will go up? Wait for the pump to come to you.
Of course, you can ride the wave; however, you need to understand momentum, which will only come from market experience. Be careful riding waves. Momentum trading can serve as a valid strategy once you identify major market movers and establish a plan with a semi-principled timeline.
- Keep it simple at first. Do not jump from one strategy to the next.
A lot of new traders find a strategy and jump ship on the first down day before it plays out. Keep your framework simple; see the strategy through in a low stakes trade while analyzing what went right and wrong.. There is no need for information overload. Please keep it simple and steadily add to your arsenal. Your future self will thank you.
This article sums up a few powerful trading techniques that I wish I would have known when first starting trading.
If you want to ask questions and hear more, we have a special event for tomorrow.
During the webinar the host will highlight some market basics and answer questions on current stock watchlists so this is a great opportunity for both new and experienced traders to engage in a fruitful conversation.