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Trading the Measured Move: A Path to Trading Success in a World of Algos and High Frequency Trading by David Halsey

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CHAPTER 5

The 90 Percent Factor—Executing Your Trade

Where the Rubber Meets the Road

Alexander Graham Bell, inventor of the telephone, said it best: “Before anything else, preparation is the key to success.” In that light, the first four chapters of this book serve only one purpose: to prepare you, the retail trader, for entering the markets and prospering as a measured move (MM) trader. The task is daunting and the challenges are many, but with sufficient preparation the journey to profitability is one that can be taken with confidence. This chapter shows where the rubber meets the road—order entry and trade management—and provides the keys for launching and navigating the trip ahead.

Priorities and Job One

There are two overriding priorities for the MM trader:

1. Achieving reduced-risk trades, and
2. Riding the coattails of Smart Money.

The remainder of this chapter will detail the rules and tactics necessary for attaining these two fundamental priorities and will address some of the reasons for their importance.

The number one priority, so important it must be called Job One, is for the MM trader to achieve free trades. Nothing is more important—nothing. Before explaining the reasons for its importance, a definition is in order. Simply stated, a reduced-risk (RR) trade is a trade in which all significant risk is taken off the table at the earliest possible time. Achieving RR trades for different trading instruments requires slightly different tactics, but generally speaking, ...

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