Having The Edge

                                                                                                                                                                                                                                                                                                    A trading method and system is only a small part of successful trading. The trader is the weakest part of any method. No trading system will work if the trader trades too big and too often because eventually being wrong will be the end of that trading account. A great trading system will not work if the trader can not trade the entries and exits with discipline. The moment that fear, greed, and ego enter the system it is doomed to failure. Here are ten edges a trader can develop to get themselves in the 10% of profitable traders, with them you can make money with a mediocre trading system, without them no trading system will work in the long term.

  1. Cutting losses short is an edge. Only having small losing trades will save you from the big losses.

  2. Letting your winning trade run as far as it will go is a huge advantage over most traders. Having some huge winning trades will help your overall profitability.

  3. Eliminating the risk of ruin through limiting the total amount of capital you will lose on any one trade will keep your account intact and is an edge over those traders that eventually blow up their trading account.

  4. Proper position sizing will allow you to keep your correct decision making process in place by limiting the emotional impact of any one trade. This is an edge over many others that panic during a big trade and make an emotional decision.

  5. Having the discipline to consistently follow a predetermined written trading plan is an edge over many others that make decisions based on opinions and feelings.

  6. Having the confidence and faith in your trading method to follow it through losing periods is a huge edge. Most drift to new methods right when their last one finally starts working.

  7. Only trade a system after you have done the homework to ensure that it is a profitable one through chart studies and back testing.

  8. Only placing entries based on actual system signals and never based on fear or greed is the edge that separates much of the profitable 10% from the unprofitable 90%.

  9. Most successful traders place their trades in reaction to actual price action not just opinions and that usually makes all the difference.

  10. A trader that is trading only to make money has a huge advantage over someone trading for the sake of their ego and to prove they are right.