The Business of Trading - Way Forward

The business of trading is simple but many lose money trading the markets.

The reasons why traders lost are because of their inability to control their emotions and the way the markets work. What can we do to deal with these issues?

1. Have a plan and system to structure how we would conduct our trading business. As with any good business, we need to work to a system to organise our decision making process. Having a system in place will help to guide us to think through what we want to do and why so that we would be rational instead of emotional.

2. Manage and control our risk. All business involves risk. With trading we know that we cannot assess the market with certainty even when we are rational. We therefore need to have risk controls in place and apply the control so that we do not put our business at undue risk when we are wrong.

3. Have a trading record keeping system in place. To improve we need to record our trading action and measure our results so that we can assess our trading performance.

4. Have a regular routine to monitor and review our trading performance so that we can subject us to the continuous improvement process.

Disclaimer:

Trading and investment involves risk, including possible loss of principal and other losses. I shall not be responsible for any losses or loss profit resulting from trading or investment decision based on my posting and any information presented in this blog.