Chapter 22. Top Ten Trading Survival Techniques
In This Chapter
Building your tool chest
Understanding and using averages
Developing your own trading system
Taking profits and avoiding losses
Buying on strength, selling on weakness
Reviewing your journal
Trading is not a risk-free activity. Although all traders know that losses are inevitable, they want to minimize those losses and be around to trade another day. In this chapter, we review ten of the top trading survival techniques that can help you enter the world of trading and enable you to continue to trade for a long time to come.
Build Your Trading Tool Chest
Before you buy that first share of stock, that first option or futures contract, or any other security, you need to be certain that you have the right mix of trading software, hardware, and Internet access to be successful. You need the right tools to identify trading candidates; display and interpret charts; research trading opportunities; screen stocks for technical or fundamental constraints; and monitor and analyze your portfolio, open positions, market indexes, sectors, and trading statistics. In summary, the proper tools are critical to finding the right trades and then monitoring those positions after you've found and entered them.
Even after you've found them, if you don't have the right tools, you may not be able to enter and exit positions efficiently, control or track your orders, track your profits and losses, analyze your trading history, or monitor economic reports, ...
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