Stop loss and take profit are the most dangerous tactics that a trader might use during a trading course.


Stop loss and take profit are the most dangerous tactics that
a trader might use during a trading course.

Stop loss and take profit are dangerous tactics

The market is chaotic, therefore the chance that you managed to buy low is minimal.
Stop loss will be the only certain thing that you will apply to handle the losing trading, and the chance that
you will suffer cumulating great losses because of that are big.

The same goes for take profit.
You try to manage your successful trade wisely. Overcome greed, euphoria and other physiological aspects
that will fail you in the long run.
But again, you stop your winning course not according to market conditions, and surely not letting the profit cover your "stop loss" loses.

Being a "smart" trader you try to combine several tactics.
Using some sort of averaging the original buying price by buying another portion of the stock or pair, after the price fell down.
This practice will eventually lead you to a point where you will risk to much in order to make the original
profit you were expecting, buying the first time.

So, how can i overcome all this? you ask yourself.
The answer is only by implementing a reasonable and logical course of action.
Combine several tactics and set of actions that will encounter every possible movement in the market,
the impact on your holdings and a lot more.

Here are some useful (logical ) rules you might consider to embrace.

  1. Never use what the 90% losing traders use.
    1. software.
    2. scripts.
    3. tactics.

  2. Never use the jargon of other traders.
    1. Back testing.
    2. Stop loss.
    3. Profit taking.
    4. Averaging (Martingale).

  3. Be innovative. Think "smart".
    (that"s all that is left... right?).


10 Feb 2014

Further reading

Algorithmic currency trading. Based on an original Trading Algorithm. Implements many trading aspects, as well as portfolio management, investment strategies and tactics. Manage a trading account with the software is available for new investors. For further details please continue to Automatic account management services .
Please notice: Trading foreign exchange should be carefully planed. Any trading on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. Please be aware that a possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should never invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Useful links:
ALGORITHMIC CURRENCY TRADING   Automatic account management services for currency trade   Silver Lines trading algorithm hosting services

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