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Posted by info@xcelbiz.ws on November 12, 2007, 3:38 am
4 Golden Rules that I use to determine if a trading method is good for
me
Dear Trader,
I wish to share this with you.
After reading Bill Poulos' "Power Forex Profit Principles" I tested
his principles that with as few adjudgements I am actually applying
his Principles all along with great success. Here are some excerpts
from his report. Although it concentrate on Forex, you can apply most
of the rules in any other trading.
"I have 4 "golden rules" that I use to determine if a trading method
is good for me:
Trading must be a complete method, with setup conditions, entry rules,
initial stop rules, and exit strategy rules, leaving no decision to
chance.
Trading must include specific risk management, money management, and
portfolio management guidelines.
Trading must be based on technical analysis, but it must not be a 100%
mechanical system.
Trading must take less than 20 minutes a day, but to apply how to
trade with it.
Lets have a look at item #3 above for a moment, because this is where
a lot of traders can potentially lose a lot of money.
When you rely on a computer to make 100% of your trading decisions,
you do not learn how to become a trader, and you never will. Instead,
you learn to follow directions. This can be extremely dangerous to
your portfolio, because almost every system I've seen has been back-
tested and curve-fit, which means it will ultimately fail, or at least
not live up to its past hypothetical results.
Some won't agree, especially with traders, who tend to believe that
you can create a 100% mechanical system that never (or rarely) loses.
Folks, that's called the Holy Grail, and a week doesn't go by that I
don't get an email from someone who thinks they have found it.
By the way, this becomes even more dangerous when you base your
livelihood on a third party service that feeds you signals every day
without telling you their "secret formula". What would happen to you
if they went out of business?
(Just for the record, I believe some mechanical systems (I use
Fibonacci Levels, Pivot Point Analysis and Pip Values) ARE good, at
least for awhile, but I also believe the only way to maximise their
use is if you truly understand how to trade in the first place.)"
Lets here what you have to say.
Pierre Pienaar
info@xcelbiz.ws
Investment Strategies: http://adcurl.com/p30
Easy-Forex? The best trading platform available today: http://adcurl.com/f69
P.S. If you wish to download "Power Forex Profit Principles" for free
click here http://www.nohypeforex.com
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