Short Term Trading Stratergies.......... YOU EITHER WIN OR LEARN!!!

In my google sheet I started sharing trade ideas. Out of the 24 trades that were closed 14 of them were........ LOSSES. Yes may be the efforts were not rewarding. That is not a joyful experience. Also there were 9 Winning Trades. They were moments to feel happy about. This is why a Trader must be critical in his learning experience. Trading is winning and learning(loosing), and it has to be a continuous process. YOU MUST DEFEAT THE FEAR OF STOPPING YOUR TRADES.

Lot Size
One of the most important lessons to learn in trading continuously is to know your lot size. This was made crystal clear while these trade ideas were executed. If someone wants to just allocate funds that aren't manageable at the time of selling at a loss, it is a big mistake of allocating that amount in the 1st place. It is easier to stomach a loss of 1000/= on a trade than loosing 10000/=. As such your loss is what you need to master before you take into trading.  How much are you willing to loose???
Let's say you can afford to loose only LKR 1000/= per trade. Then you need to 1st figure out the quantity you would want to buy in order to take that loss. Once you figure out that only 1000 bucks you are willing to Loose Per Trade.The next you must know is the difference between your Buy price and the Stop Loss price in order to figure out the Loss Per Share. If your Buy price is 10/= and your Stop is 8/=, that means the loss per share is 2/=. Since the loss per trade is 1000/= and the loss per share is 2/=, you then divide 1000 by 2 to arrive at the quantity you'd want to buy, i.e. 500 shares. This is your LOT SIZE.

Position Size
But that's not all, once you know how much you are going to buy, you also want to know the maximum amount you want to allocate to your trade, what is your POSITION SIZE? This is what will make you control your risk further. By knowing how much you want to allocate for a trade, you will preserve funds to continuously Trade. This I call Trading Flow. As a trader you need to see your trades keep flowing, this can be done only through continuous trading. As such TRADING FLOW or FLOW OF TRADING is very important. To work out your Position Size, you must decide on a % of your funds to be allocated to each trade. If you have lkr 100,000/=, and you want only 5% to be allocated for every trade, THEN YOUR POSITION SIZE is lkr 5000/= per trade.

Remember this is serious business. It's your hard earned money that you are putting in, to make it grow. But as in any business you won't always make money.

IN GOOD TIMES YOU MAKE, IN BAD TIMES YOU LEARN. IMPORTANT THING IS TO CONTINUE IN YOUR TRADING TO ACHIEVE YOUR GOALS AND OBJECTIVES.

My google sheet is given here:

https://docs.google.com/spreadsheets/d/1YDdK1JHGGSc8i52P21vCK8MNto2-Y0H4l53PLE_ms04/edit#gid=1284556771