Wednesday, September 29, 2010

Increasing your odds for Trading Success.

Trading is all about stacking the odds in your favor. Risks must be taken in order to get paid, but the key is gauging under which circumstances the potential reward really outweighs that risk.

Know your Risk

Option traders often talk about the ‘maximum risk’ on a trade, Because on some strategies they are able to truly limit their downside risk to a set amount.While stock traders needs to think in terms of a different kind of risk factor. Yes, I could buy 100 shares of GOOG at $520 per share, and my max risk would be $52,000. But that’s not a practical measure of risk,. Why? Because over the time frame I'm looking at (few hours to a few days) that is extremely unlikely. Instead, it is important when trading stocks to think in terms of max $ risk if the trade fails i.e. if your stop is hit and not if the underlying company goes to zero.

Know Your Exit

First there is no such thing as a perfect exit strategy, but having a plan before the action happens is a huge part of any trade. Having a exit strategy is more important skill than have an entry skills. You can pass up good entry points without much damage to your bottom line. But passing up good exits can really damage your bottom line.A good trade is usually a planned trade, and that definitely involves knowing your exit from the outset of the Trade.

How can help at you increse your odds for trading sucess?

1. Subscribing to a Trading strategy- Take the hassle out of deciding risk and exits. Following a strategy on Zignals can provide you with a proven winners strategies entries and exist in Real time.

2.Using Trade Timer- Trade Timer at Zignals lets you can tweek your exits to many different conditions using profit targets and stop targets and for the more advanced Trail targets and Trail Stops.You can then backtest these exits and adjust stops based on results.

3.Using Zignals Alerts, this tool can help you manage you exits by sending important alerts on stocks your trading in real time(Either Email or SMS) .

These are just some of the tools at Zignals that can help you increase your trading odds.



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