There are four pillars of success when trading:
- Trend - It is essential to know what the trend is to trade more often in that direction. We use many trade models and Alpha Indicator models to determine trends. The simple tools are cycles of long-term charts. We have learned today to trade long-term charts and enter and exit using short-term charts.
- Fill Price - It is also essential to get a reasonable fill price to set up Pillar #3, your exit price. We found no one can buy the bottom tick or sell the top tick, so why try? The solution is to scale into trades and out of trades to stay close to the market entry average price.
- Exit Price - It is essential to maximize profits, but again, no one can exit the max tick from entry all the time. All markets turn, so we reduce our exposure by scaling out trades as the market shows profits and sometimes losses. We will even enter and exit additional contracts when the position average is less than the current price. We call this Price Advantage model.
- Take Your Ball and Go Home - Once you hit your objective, there is nothing wrong with stopping trading and coming back another day. The more time you are in a trade, the more risk that you will take.
Futures, Options on Futures and Forex trading involves a substantial degree of risk of loss and is not suitable for all individuals. An investor could lose the entire investment or, in some cases, more than the initial investment. Past performance is not necessarily indicative of future results.