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3 keys to great performance
- Big money when it’s right.
- Continued profitability.
- Avoid big losses when you’re wrong.
Rule 1: Focus, don’t scatter
- Centralized positions make positions easier to manage.
- Concentrated positions keep you focused.
- Concentrating your positions allows you to be patient.
Focus on the best targets!
Rule 2: Increase Turnover
- Forget about the tax issues (if any) that arise from the transaction.
- Don’t think about the next new high.
- If you’re wrong, admit your mistake, don’t be persistent .
If there is a decent profit, it is necessary to stop the profit in time!
Rule 3: Timing
- Timing is money.
- Learn to read pictures.
- Learn to recognize the VCP pattern (The Volatility Contraction Pattern).
Sit back and wait for the opportunity to present yourself!
Rule 4: Manage Profit-to-Loss Ratios
- Calculate the profit/loss ratio of the trade.
- Do not trade with a profit/loss ratio of less than 1.
- Regularly monitor the floating profit of the position.
- On a target, don’t let a loss eat up all the profits, you must stop the loss after taking back 1/2.
- Do trades with high profit-to-loss ratios so that you can even out trade wear and tear.
risk first
- Plan your trades and place a stop loss before opening a position.
- Write it down, or open a position with a stop loss.
- Cut your losses without hesitation.
Not firm stop loss is the most devastating mistake.
Rule 5: Go with the flow
- Trade with the trend.
- Don’t flatten your stop loss.
- Confirm trends with multi-period analysis.
Learn to tell if a trend is healthy.
Rule 6: Increase the position with floating profit
- Enter in batches , not a single win or lose.
- On the basis of profit, increase risk exposure.
- Our goal is to have the largest position when the transaction is the most successful, and the smallest position when the transaction is the worst.
Why add to a position if it doesn’t make a profit after putting in 25% or 50% of the position.
Rule 7: Do parity protection as soon as possible
- When to do parity protection? When the floating profit reaches a profit-loss ratio of 2 to 3 times, or when it is higher than the average profit.
- Don’t let a decent profit turn into a loss.
- At the beginning of the bull market, if the 50-day moving average is not broken, you can continue to hold positions.
The priority of the operation:
a. Cut losses.
b. Affordable Protection.
c. Protect profits.
Rule 8: Sell on rallies
- Selling when prices are strongest is often the best price in the short term.
- Selling early is better than selling late.
- No matter whether the price rises or falls later, selling half of it can be invincible.
Rule 9: Review regularly
- Because trading performance doesn’t lie.
- Look for commonalities in failed deals.
- Correct your weaknesses.
Know the truth about your trade!
Rule 10: Avoid Style Drift
- Start by defining your own trading style.
- Stick to your style and be willing to sacrifice other trading opportunities.
- Do it repeatedly and become an expert.
Conclusion: Take responsibility for your own transactions
- If you don’t get the results you want, don’t complain, take responsibility, learn, and act!
- The important thing is: believe in yourself, you are more capable than you can imagine.
- Rules are useless unless you follow them. Many traders don’t have rules, and some traders have them but don’t follow them.
Source: Super Trader Tactics with Mark Minervini
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