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The Commodity Trading Forum is a presentation of |
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Free Commodity Chart Service |
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The Commodity Trading Forum is a presentation of |
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Free Commodity Chart Service |
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Commodity Trading Discussion Forum
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Re: Why people lose money trading commodites
Posted By: Trades In Response To: Why people lose money trading commodites (Mouse Man)
Date: Monday, 2 November 2009, at 11:16 a.m.
One of the 1st rules that POP wrote in his Phantom of the Pits ebook that could apply to most people is to put on 1/2 the position you are planning on. This removes a lot of pressure and risk to anyone. If the trade moves against you and stops you out you have only lost 1/2 of what you would have without the stress of being typically maxed out on the position. This also keeps one from using too much margin or leverage that threatens your capital and a trade has more wiggle room to work. If you are correct and price moves up you can add the other 1/2 or a 1/3 or 1/4 on the way up. This was one of the best all round generic rules I have come across that would help most traders without being unique to each individual with specific traits we don't all have. I personally found it allowed me to think more clearly and rationally as the trade moved up,down and sideways and my decisions were far better without being emotionally based.
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