Over the long-term, the market conditions changed. A system that worked in the past may not be relevant in the new market conditions. You have to review and fine tune the system when market conditions change. You will know when you realize you have more losses than usual even though you are complying with the rules of the system with strict.
Trading opportunity when it comes, you have to have a set of predetermined rules or system to help you evaluate potential trading (measures). Second, you must know your position size to buy true/lot number (quantity) is based on the size of your capital. Third, you must determine the cut loss and profit taking price and calculate the risk reward ratio to ensure a minimum of 2 times the risk reward you. Fourth, you should know what is the probability of winning using your system in current market conditions. Lastly, trade and wait for the market to decide if you are right in the elections caused profit.
"A clever, avoiding the sharp spiritual, but soon attacked him when spiritual is being sluggish and tends to return. This is the art of studying moods. "(Sun Tzu)
The central idea of trading is range in reading the mood of the market. Price action and volume indicators, are signs for traders to see the mood of the market and the behavior of investors. You will trade well when you can interpret the mood.
"This is a military axiom not to go up against the enemy, or to oppose him when he came to decline." (Sun Tzu)
The key to trading not to fight the trend. When the market is trending up, looking for opportunities for long and not short. Similarly, if the market trend to decline, look for opportunities to short and not long.
"General forward without envy the fame and retreats without fearing disgrace, whose only thought is to protect his country and do good service for its sovereignty, is the jewel of the Kingdom." (Sun Tzu)
Traders should win in the market rather than to prove and show off that she's right, but for profit. When he is wrong, he must cut loss without feeling disgrace. Only by having this mentality, he can do the best trading in his account.
IN TERMS OF WINS IN THE MARKET
"If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself, but do not know the enemy, for every victory gained you will also suffer a defeat. If you do not know your enemies nor yourself, you will succumb in every battle "(Sun Tzu)
This is a common phrase cited. In trading, it is true that you need to know yourself. This includes an understanding of psychology you are and how You behave or react to profits and losses. The enemy in this case is the market. You need to understand the market before you make any investment. You need to take the time to understand the market, make sure to have the advantage over the rest of the investors. With a good understanding, you can design and use the system to take advantage of market movements. In addition, you will be able to apply the right tactics to beat the market. If you do not understand the market and you do not understand yourself, chances are you will end up in the loss.
"To secure ourselves against defeat lies in our own hands, but the opportunity of defeating the enemy is provided by the enemy himself." (Sun Tzu)
As a trader, you need to protect your trading capital and abide by your trading system for entry and exit. After you make sure you have done your part, the amount of profit or loss is to be determined by the market. You do not have the right to request any amount of profit from the market. Even if you follow all the rules strictly, perhaps you can loss but you have to accept it and move on.
"What the ancients called a clever fighter is one who not only WINS, but excels in winning with ease. He won the battle with strives to no errors. Make no mistake is what builds the certainty of victory, for it means conquering an enemy that is already defeated. Hence the skillful fighter puts himself into a position which makes defeat impossible, and does not miss the moment for defeating the enemy. " (Sun Tzu)
For trading correct is to follow the system or set of rules. Making a mistake means traders do not comply with system or rule when trading. Traders don't follow the rules because he was influenced by his emotions, which in turn affected by the news, recommendations, and comments from others. To win in the market, the trader must strive not to make mistakes, that is, he should be able to do without trading anyone influencing her decision making. This is especially true when there is a chance the cut loss. A trader who failed to cut loss did a big mistake. Because one mistake can wipe out profits and capital. It is very important to position themselves in the market by working without making a mistake.
"The art of war teaches us to rely not on the likelihood of enemy's not coming, but on our own readiness to receive them, not on the chance they were not attacking, but rather on the fact that we have been making unwavering positions." (Sun Tzu)
As discussed previously, a trader must make intricate to put himself in a position such that it has a higher probability to win in the market. You don't have to have the mentality of conquering the market. Benefits are determined by the market and You can't force it.
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