Trading with TrendLine Dynamics Charts

Closing Tips

Practice

Start with paper trading. Paper trading is where you engage in simulated trading by selecting hypothetical trades and manage them to completion without putting any actual money at risk. This can be a good way to get used to selecting signals, figuring out your initial protective stop and position size, and monitoring market action until it is time to close the trade.

Paper trading allows you to become accustomed to using the system. After you have done paper trading for a while, then switch to real trading with very small real positions. I would suggest using a maximum of 1% of your trading capital per trade at first. Even if you did really well while paper trading, do not be surprised when your initial returns are pretty awful when you start trading with real money.

There are powerful emotional aspects to trading with real money that just aren't there when paper trading. These emotional aspects can be dealt with, but keep your position sizes smaller than you think you need to until you can execute your trades with real money the same way that you handled them when you were paper trading.

Keep a Written Record

Write down which signals you took and why you took them. Also record the stock, entry date, entry price, exit date, exit price, and how you decided to exit. Hindsight distorts the facts. In order to learn from your mistakes, you need to see the facts just as they appeared when you were considering the trade.

Look For Reasons Not To Take The Entry Signal

The software's job is to wade through heaps of data and find opportunities. Your job is to evaluate those opportunities and throw out anything that doesn't look or feel right.

Keep Position Sizes Small

Small position sizes protect your principal and they help you remain objective about your positions. There is no down side. If you are thinking you can't make any money with small positions, go read the Van Tharp books listed in the "Getting Started in Trading" article.

Maintain Rigorous Exit Discipline

If you want to make money in the capital markets, you have to learn to be ruthless in executing exit signals.

Good Management

Approach trading as a business. Keep good records so you can learn to reproduce previous wins and avoid previous mistakes. Do periodic reviews of your trades. Always bear in mind that your most important tools are position size and exit discipline. Get those two things right and you can become a successful trader.

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