A Target-Centric Approach
Eyes on the Target
A popular way many traders approach the market is to come up with a trade idea.
Usually an entry:
- I think this level will hold
- We’ll break out here
- The market will test and rip from there
Then they structure a stop. Then they consider a target.
There’s nothing wrong with that, but here’s another way that might help you to
- Hold trades longer
- Take fewer substandard trades
Start from your target and work backwards
Pick a level you think the market will likely hit, then consider how you could best express that trade and where the entry would be. This allows you to think differently about the trade. You start to consider RvR more.
You also start to think more about entry accuracy and trigger.
It slows you down and you view the bigger picture, rather than being so zoomed in on the entry.
Today, consider thinking about your trade target first. Work back from there.
Where do you expect this trade to go? How can you express this idea with minimal yet sensible risk management?
It might just reframe your thinking and change the way you trade for the better.
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What Makes for Success
Today’s resource is an article from Brett Steenbarger’s blog Trader Feed.
This guy really knows his stuff and a recent post titled “What Makes for Success: Five Perspectives From Trading Psychology” really caught my eye.
“The success of a trader is directly related to the speed by which they turn losing trades and drawdowns into actionable improvements.”
Worth a read.