This is a particularly interesting question that I am asked regularly during my coaching sessions and to which I am going to try to give an answer. Interesesting, not for its relevance (my apologies to those who asked this question I must have asked myself a while ago) but rather for the paradoxes about trading it raises. First, let's try to give a precise answer. There are many ways to make a living from trading. Work in an hedge fund but you will have to apply a specific strategy and you...
Understand the most common mistakes traders make.
1-You think that trading is EASY
2-You don't cut your losses and take gains too early
3-You believe that you have an advantage without measuring it
4-You want to be right
5-You don't understand that trading is all about probabilities
6-You underestimate the amount of work required
7-You believe that finding a winning strategy is enough...
What are the ingredients of a consistently profitable trading system?
1-Risk management or how to avoid the risk of ruin
2-The expectation of gain
3-Reason in terms of probabilities
4-The importance of volumes
5-The pivot point
8-Deal with the market trend