Share This letter with Friends on Twitter, Facebook and Other Social Networking Sites:
Prioritizing Trading Skills -- By: Bill Kraft
Copyright 2010, Makin' Hay, Inc., All Rights Reserved
Bill Kraft
Editor |
Last weekend I wrote about taking an inventory of our trading
skills and my belief that how we prioritize them can make a
substantial difference in our trading results. The list I included
was as follows:
a. knowledge of and ability to use various orders
b. technical knowledge and abilities
c. understanding and using fundamentals
d. utilizing reward to risk potential
e. finding candidates to trade
f. entry decisions and strategies
g. exit strategy
h. devotion to continuing education
i. ability to discipline one's trading
j. money management
k. having a plan in general and for each trade
l. knowledge of and ability to use various strategies
I suggested that you might want to see how you would prioritize
the list ideally and how you have prioritized it in actuality in your
trading. I'm guessing the exercise might have been at least somewhat
useful in gaining some insight into your own trading personality.
It seems fairly clear to me that the trader whose first priorities are:
- understanding and using fundamentals
- finding candidates to trade
- entry decisions and strategies
might have vastly different results from a trader whose first priorities are:
- having a plan in general and for each trade
- ability to discipline one's trading
- exit strategy
- utilizing reward to risk potential
Doubtlessly, each of the skills in the overall list are
important to at least some degree. As a trader, I am convinced that
certain of those skills must be utilized and in terms of priority fall
on the same critical level for me. They are as follows:
Highest Level of My Priorities
- Having a plan in general and for each trade
- The ability to discipline my trading
- Money Management
- Exit Strategy
- Using reward to risk potential
- Devotion to continuing education
Next Level
- Technical knowledge and ability to use as discipline
- Knowledge of and ability to use various strategies
- Knowledge of and ability to use various orders
Final Level
- Entry decisions and strategies
- Finding candidates to trade
- Understanding and using fundamentals
In my books and in my personal coaching, I discuss these skills
and illustrate what I consider to be the relative importance of each.
Why, for example, would I suggest it is more important to use a
minimum reward to risk potential than it is to find a candidate? Why
is exit strategy more important to me than my entry?
Obviously, minds may differ on the priorities given to these
different skills and I can't say there is some "best" answer as to how
to set these priorities. I can only say I think some line-ups are
better than others. Throughout the year, I expect I'll return to at
least some of the individual skills I've touched on here and attempt
to develop a more detailed picture of the value and importance of
various of these skills.
Good Trading!
Bill Kraft
Success Trading Group -- by Success Trading Team
Our Success Trading service delivers quality trading ideas for the elite investor that has the financial wherewithal and market nimbleness to profit on small moves in a stock's price. Become a member and you will be provided with email and/or mobile alerts intended to provide you with the opportunity to make many, many profitable trades.
Trade Quality
Stocks Over and Over Again
Over 405 winning trades and only 9 losses!
Register Now
and Get $50 off our Normal Website Rate
Option Trader -- by Bill Kraft
Our Option Trading Service is for conservative traders that understand leverage principles and enjoy the challenge of options trading. We focus on powerful option trading strategies that place volatility and momentum in your favor. And we pride ourselves on always minimizing our losses!
The Option Trader service utilizes standard trading in Puts and Calls as well as strategies using Leaps, Straddles, Credit Spreads, Calendar Spreads, and Naked Puts. But no matter how sophisticated a strategy may be, we ALWAYS know our downside potential on every trade.
Here's a look at a trade Bill is currently working on:
The Blackstone Group (BX)
BX looks as though it may have made a support in the $12 -
$12.50 range. I'm considering LEAPS calls, perhaps the BX Jan12 7.50
call that currently has a delta around .80. The stock looks to have
some decent upside potential and I would set an initial exit below the
recent support in case I was wrong on the direction.
Good Trading!
Bill Kraft
Editor of $10 Trader, Option Trader and Trend Trader
"Trade Your Way to Wealth" by Bill Kraft is an Amazon.com best seller!
"Smart Investors Money Machine" is Bill Kraft's most recent publication.
"Trading for Keeps: Making Money with Low Risk Option Trades" a trading DVD by Bill Kraft
Try our Option Trader Real-Time Alert Service
and Get $50 off our Normal Website Rate!
Achieve returns with us like
16.48% return in 5 days!
Trend Trader -- by Bill Kraft
Trend trading as we try to practice it is a form of momentum trading. We prefer to try to capture profit out of the middle of the trend rather than try to catch reversal at bottoms and tops.
Here's a look at a trade Bill is currently working on:
Teekay LNG Partners LP. (TGP)
This one has been trending up since November of 2008 with
retracements along the way. Recently, share price retraced to the
trend so it looks like TGP may be set up for the next leg up.
Good Trading!
Bill Kraft
Editor of $10 Trader, Option Trader and Trend Trader
"Trade Your Way to Wealth" by Bill Kraft is an Amazon.com best seller!
"Smart Investors Money Machine" is Bill Kraft's most recent publication.
"Trading for Keeps: Making Money with Low Risk Option Trades" a trading DVD by Bill Kraft
Try our Trend Trader Real-Time Alert Service
and Get $50 off our Normal Website Rate!
$10 Trader -- by Bill Kraft
We really enjoy trading stocks that are $10 and under. Often they provide the chance to enjoy high percentage gains and, of course, at worst, the risk is limited to what we paid for the stock.
Here's a look at a trade Bill is currently working on:
LoJack Corp. (LOJN)
$10 Trader closed a position on LOJN on Friday to capture
a 5% gain in just 15 days (before the small commission). The stock
price has been moving in an uptrending channel and looks like it may
offer another buying opportunity on a bounce at the trend line.
Good Trading!
Bill Kraft
Editor of $10 Trader, Option Trader and Trend Trader
"Trade Your Way to Wealth" by Bill Kraft is an Amazon.com best seller!
"Smart Investors Money Machine" is Bill Kraft's most recent publication.
"Trading for Keeps: Making Money with Low Risk Option Trades" a trading DVD by Bill Kraft
Try our Under $10 Trader Real-Time Alert Service!
Dividend Trader -- by Dividend Trader Team
Our Dividend Trader service focuses solely on the "best of the best" dividend paying stocks. We trade these stocks for short-term gains and we will also buy these stocks for their powerful dividend producing income with a purpose to make capital gains as the stock increases in value.
With these trades we attempt to get in and get out quickly. Once we buy, we immediately set an exit point of 3% above the buy price. We have had great success in the past. In fact, we have put together a string of 61 positions in a row that have hit our 3% target subsequent to the buy alert!
While we titled this service a "trader" service, we also invest in these dividend-paying stocks from time to time for the long-term. We will buy these stocks for their powerful dividend producing income with a purpose to make capital gains as the stock increases in value.
Many of the stocks that we will be "investing" in have had a history of raising their dividends almost every year. Year after year. This can be powerful. Building up your dividend income in a tax deferred account such as an IRA can siginficantly boost your account over the years.
Feel free to sign-up for a free 30-day trial. During such time you can review our Trade Tables and see the type of stocks we are buying. You will also receive in real-time all the new trading and investing alerts we send during your trial period!
Register Now
for a 30-day FREE trial to our Dividend Trader service.
