Investment Strategy

Prior to conducting transactions in various financial instruments such as stocks, options or futures contracts, either forex or stock index, it takes preparation and planning to avoid possible risks.

Preparations are set forth in the form of a trading plan based on market analysis made earlier, which contains:

  1. Entry Level
  2. Exit Level
  3. Stop Loss Level
  4. Target Profit level

Trading Tips

  • Each took a position, you will be faced with the possibility of gain or loss (Exposure).
  • Measure limits your ability to avoid such losses would disrupt the company's financial or family.
  • Prepare Mental Indepencence which is one key to success transact
  • Know your personal, does include people who are able to control emotions and be able to sleep well despite the position? Because the key to the success of the transaction is not affected by the emotion of the existing positions.
  • Use and Discipline of the 'Trading Plan', start with a small amount.
  • Provide a margin of three times the amount that must be provided, for the safety of your funds.
  • Reduce your position if necessary, because of margin deficiency can result in losses.
  • Do not be greedy.
  • Focus on the goals or targets in expected profits.
  • Do not be quickly changed his mind.
  • Before you make trades or take a position, first set the trends and projections of financial instruments to be purchased / sold. If you are in doubt, do not take a position.
  • Trend analysis based on the Chart (Technical Analysis), the fundamental news and market sentiment.
  • If you find a position that has taken the wrong / false, do not hesitate to admit mistakes.
  • Take the steps necessary to address risks such as loss or Cut Cut & Switch, Locking / Hedging, or Average.
  • Never went along with the transaction of other people while you have not done the analysis (Do not follow the crowd)
  • Do not read the news, but analyze the news.
  • Be careful, If all the market has turned into one direction.
  • Do not take too many positions on a single account.
  • You are required to know all too well that you invest in financial instruments from various aspects.
  • Do not transact with the lot of many at one price.
  • Taking profits too quickly will reduce the opportunity to gain greater "Let Profits Run"
  • Do not let losses protracted. Use the "Stop Order" to prevent losses that are too large.
  • When the position of a sudden give you an edge in bulk, take it and do not let the opportunity was lost.
  • Install an order if you are not in place and still follow the market developments.

Developing Strategies Transactions

  • To develop the strategies you are trading there are a few things to do are:
  • Do not stop learning.
  • Take advantage of all available information.
  • Do not hesitate to try, go directly.
  • Ask experienced
  • Do transaction approach.
  • Do not ignore the discipline to trade.
  • Recognize the limitations of the factors you have transactions ie: Limitations of time, capital, equipment or means of trading, emotional / psychological and other

Determination of the approach to trade

  • Determine the transaction period (short, middle or long term).
  • Determine the profit target: Is a little bit at a time or expect large.
  • Determine the transaction limit, whether single (one position is closed by one position) or multiple (multiple positions covered by one or more positions).
  • Determine its own transaction system.
  • Define the basics of the analysis: whether requiring Chart and fundamental news.

There are some basic techniques in conducting transactions (primarily futures contracts and stock), including:

  • Stop / cut loss

Is to liquidate a position at the level of the maximum loss you can accept, if the market moves against the existing positions. Limit losses will be determined after an in-depth analysis and in accordance with the trading plan that you created earlier, such as technical analysis based on the consideration of putting a stop loss selling below support levels and stop loss buy above resistance level.

  • Cut & Switches

The basic principle of this technique is to make changes to the position of the transaction. This is done if the initial position of the transaction losses (one way), so that transactors will perform cut loss (liquidating the initial position) and also directly open a new account position in the opposite direction to the starting position before the transaction.

  • Hedging / Locking

Is a way of protecting the investment value of the transaction or to limit the risk of transaction loss by locking the position of the transaction by taking a new position opposite the original transaction.

  • Averaging

With this technique required a very strong capital and the patience of the trader, because this technique will maintain the existing position of the transaction, even adding a new position in the direction of the initial position each time the price close to or penetrate support or resistance level for the target transaction has not been achieved . If the market moves according to position, then the benefits achieved will be very large, but if it continues to contrast with the position it is needed to funds to continue to maintain a position that is not exposed to margin calls

Trader Psychology

Understand how to analyze the market properly is part of a strategy to get an advantage in investing. Many were expecting when can analyze the market properly, then the profit will be easy on the gain, but in reality, it's very far from the estimated
It must be realized that the very influential in gaining the psychological advantage is you as an investor. The nature of impatience, greed, fear, panic, undisciplined and feeling like a disappointment, frustration will color one's trading pattern which in turn will determine the result of loss or profit. Hence the term "Dealer is born and not made", though not entirely correct but there are elements of truth.

Losses in the transaction is not a pleasant experience, but will inevitably have to face and accept reality. Basically trading losses can be classified into 2 groups: the loss due to error analysis / outlook on the market while others are caused because the pattern of trading and private dealers such as too sure of his opinion, Overtrading, the transaction because the company suffered large losses, let the protracted loss , blame the market, do not have stop loss and profit taking objectives, solely relying on the feeling, take a little profit while losses are generally larger, and so on.

So, it all depends on you which will include group!

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