Goal Number 1

[...] I’ve written a number of posts in the past about such topics as Trading Without Emotion, Trading your Personality, Goal Number 1, Trading Goals, Doing Your Homework, How Much to trade and even When Not to Trade. This series will be an attempt at going a bit deeper on these topics as well as tying them all together for the benefit of any trader, regardless of timeframe or trading experience. [...]

[...] The next thing to consider is the amount of money you will be trading with, or your ‘risk capital.’ This amount is different for every trader, but it ought to be an amount which is large enough to generate good profits for you, while remaining small enough (initially at least) that if you were to suffer some setbacks it won’t affect your financial well-being extensively. Yes, all losses will be felt, but I am referring to your nest egg. If you’re starting out as a beginning trader, it’s wise not to roll the dice with that big savings account you’ve worked so hard at building for many years. Take a portion of it to use for your trading, and dedicate your time toward learning how to first preserve it (see Goal Number 1), and then how to grow it. [...]

[...] Achieving greatness in trading begins with humility. Stubborn pride doesn’t accept losses easily, so put it aside on a regular basis. Check your ego at the door. The market’s bigger than we are, so if we argue with it long enough we’re going to lose! Keep those stop losses in place and give yourself the best possible chance to win this battle! [...]

[...] How ironic! He failed to mention that a long-term investor such as himself can indeed suffer considerable losses during a market correction, especially considering how few are hedged or short selling the way most day traders do. It’s also interesting to note that his long-term investors can be at greater risk than a day trader during a downturn, especially considering that they are mostly invested at all times and a day trader can take a position in cash (thereby preserving capital, not losing it). [...]

[...] At times, you’re going to be better off just not trading at all. For some, it’s the first few minutes of the trading day or the very end of the session. For others it’s when you have personal distractions, such as during the holidays when family is in town, or when a life-changing event comes along. Some traders just can’t stand to trade during the light-volume summer months. Whenever your least-favorite trading time happens to be, it’s up to you to identify it and avoid it. Shutting down the PC during that stretch will keep your mind clear as you avoid any confusion which would result from your trading activity then. You’ll be preserving your trading capital (Goal #1) instead of adding to your broker’s bottom line while your account stagnates. Take a trip. Go tee it up or scratch some things off your to-do list. Just find a way to take a break so that you don’t trade when you know it isn’t your ideal time to locate profits. [...]

[...] Here are a few articles about my trading style… *Deciding if a Stock is Trade-Worthy *Small Mistakes = Small Consequences *Goal Number 1 *The Day After *Check Your Rolex *Another Definition of Trading [...]

[...] * Capital preservation is a priority to traders, but even longer-term investors would be better off incorporating some risk management elements into their plan. It all boils down to respecting the market and setting that ego aside. Your need to be “correct” can become costly if you allow it. So respect the market, or it will force you to respect it! We have to accept some level of risk in order to profit in the market, but even a small measure of humility should be a part of the plan because your timing may be off. [...]

[...] So as you proceed down the path in search of profits, remember to be patient with yourself. Take it slow if you’re just starting out, and don’t force trades, especially if you don’t have a defined trading plan or method. Preserving your trading capital so that you can stay in the game is your number 1 priority if you’re going to find success in this game. [...]

[...] As traders, we all have to remember our top priority and keep our trading accounts intact so that we can stay in the game. However, often times we ignore the state of our emotional capital and the importance it carries. When we neglect the condition of our psychological capital, we leave ourselves vulnerable to a different kind of drawdown – the worst kind. [...]

[...] Here are a few articles about my trading style… *Deciding if a Stock is Trade-Worthy *Small Mistakes = Small Consequences *Goal Number 1 *The Day After *Check Your Rolex *Another Definition of Trading [...]

[...] Knowing that the market corrects is one thing, but making provision for your own safety in the event of such a move is entirely different. In my next post, we’ll look closer at a few specifics on how to put this idea into practice, but I wanted to set the table for it today and post a reminder that goal #1 is based on staying in the game. Without a sound understanding of that basic principle, making money over time becomes far more difficult. [...]

[...] Returning to cash offers opportunities like nothing else. Not only does it clear your head and leave you fully objective when viewing the price action, but you can sit on your hands until your favorite setups come along.  You’re able to watch the price action and move quickly when you see the need.  And most of all, you can preserve capital. [...]

[...] Returning to cash offers opportunities like nothing else. Not only does it clear your head and leave you fully objective when viewing the price action, but you can sit on your hands until your favorite setups come along.  You’re able to watch the price action and move quickly when you see the need.  And most of all, you can preserve capital. [...]

[...] it’s profits you want, then you care about preserving capital and managing your risk whenever that capital of yours is on the [...]

[...] capital is the top priority of all successful traders. Making money is [...]

[...] goal is to live to trade another day, week, or month. If your survival as a trader comes down to the [...]

[...] of taking that approach, these highly impatient traders don’t realize the primary importance of preserving capital and the secondary aim of turning a profit.  Instead, they want to be highly [...]