Proper Arranging of Your Trades

Trading - the digital brain game, where markets are formed of the minds of men. Their comings and goings, on mass - is what we track. Accumulation and distribution, supply and demand, going this way and that. Bell curves, indicators and chart patterns - it's all about anticipating where it's at!

Formerly little piggy has left to market with our hard earned savings, psychologically, a part of us has entered the market and we go emotionally minded, making irrational decisions and all sorts of unneeded mistakes come. How do I make simple, the complex path from entry to exit? Here are some logical ways to manage yourself and your trade from A to B.

I trade between whole numbers
I trade among whole numbers as ordinarily corrections that occur among the whole numbers are littler and further manageable than corrections that pass close to non-whole numbers. The experienced traders are generally taking profit at whole numbers, selling into volume, while the inexperienced are buying into an ending trend, thus being caught in and carved up in a correctional profit taking trap.

It's superior to trade since a completely number once the correction is completed, fairly than before a whole number when the correction is about to begin. For example I don't buy at $1.80 - $1.90 as the price approaches $2.00. Being a whole number, I went long, after the correction finished and the market proved itself to me by also moving into new highs on volume, confirming that the market was actually moving higher (the entry signal price bar would be above the $2.00 plus mark), then trading to the next whole number, to exit at $3.00. With further experience and Elliot Wave examination you will acquire to see market re-balancing and sustain points as the market moves through time and cost. You will learn to see the 10 patterns corrections fall into, giving you an understanding of their beginning, middle and end. In the mean time till you have highly-developed an acknowledgment and understanding of larger corrections that come close to whole numbers, it's most amazing to nullify them.

Use some rules to stay cool
I need to manage myself emotionally and my position logically. A winning or losing journey can cause high anxiety. If you've developed enough intuitional, emotional trading intelligence, that's fine. If non you will ask to produce a little organizational logic or run for cover!

Trade management for me is a set of logical rules I've developed to suit my trading personality. It delivers signals without any emotional decisions, from entry to exit. Being in a trade that has a set of trading rules to cover the many possible mishaps that occur along the way is very comforting. It keeps my mind clear and centered on what I need to do at every point of my position. If you don't have a set of trading rules to manage the trade or if you break or change the rules whilst in the trade it means you have become emotional, and loss will surely find you.

A trade management plan also offers the structure upon which to modify and hone your learned trading insights to improve and build your trading results. You can polish your signals as you discover to discriminate further details inside a trade. It can also include organizational aspects such as preparing your mind with some focusing exercise (like meditation), clearing your workspace, having buy/sell dialogue boxes checked and ready to go, peace and quiet - or loud music if that suits you! All your software needs to be checked and ready to use. There is nothing worse than having technical glitches while you have your money in the market and its moving fast!

A mechanical way is a beneficial place to start learning some of the key trading rules you will need to make your own. The mechanical system I use as ‘trade management' is a Japanese vision called Renko, which is now becoming common in important charting programs. Visually it has simple black and white boxes making it easy to understand. Using Renko on daily default setting is fine - the box size is calculated much like the Average True Range (ATR) taking into consideration the daily range. The clean change in box of white to black is the trade direction exit indication. Because Renko takes the price and range into its calculation it is essentially taking the personality of the trend into consideration. Renko doesn't take time into the equation.

(Another formidable concept is the Darvas Boxes). Renko gives the market room to move, that is, it allows the market to run, accommodating any reasonable swings but protects profits. It's not a perfect concept but it does take a balanced stand on most of the necessary aspects that normally elude us in riding a trend to the max. It manages the common error of placing stops too close or taking profit too early for no just.