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trading Hedging by D este
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trading Hedging |
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Finance & Investment,Investment
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Many traders talk about supply and demand when trading and writing trading plans. Few traders define what supply and demand levels really are and don't know how to chart them. This is another step in building your knowledge required to make money from your competition instead of paying them. A demand level only becomes a demand level if the initial rally from the demand level is at least three times the demand level (1:3 Risk/Reward). In other words if the distance from entry to stop is two points in a market, the initial rally from that level has to be at least six points or it does not qualify as a demand level for us. Traders should ignore any demand levels that don’t meet this minimum requirement. Risk reward The opposite is true for supply, same concept and rule. Having an overall trading plan that details how we will trade and protect our money is most important. If we are not trading well, we need to know how to fix it. By having a trading plan, we have a base on which traders can identify the problem and fix it. Without a trading plan, we would not know what we were doing wrong. More importantly, to duplicate successes, we need to know what we did to find that success to make winning trades.
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