Initial Risk Off Targets

By: Chris on 2013-06-29

Stock Trading Tips

A lot of what is done by a trader is to maximize profits and this shouldnít be ignored. I will say that my focus points generally involve some way of eliminating risk. This can be done through a gradual tick up strategy or through the initial risk off trading target.

Create Profits Quickly In The E-Minis

When I ponder what makes a trade profitable or efficient I canít help but emphasize the idea of placing yourself in a better position than before. This can be done with a previous trade in mind or simply with progress in mind. A common example of taking an initial profit is what is described in our 200 EMA risk off strategy. We do this on our positions to eliminate a previous loss or to simply get the ball rolling in the right direction as the trading day begins. Taking profits yields progress which should be any tradersí goal. If you have a trade that gives you 20 ticks right off the bat, why not take advantage of this?

Financial Markets Candy Treats

The way I see it, the market has just given me a piece of candy that could make the next few minutes a little bit sweeter. It makes the next few seconds or minutes just a little bit easier to sit through. Would you pass up on a piece of candy knowing that this could make your experience a little bit more fun?

I know I donít pass up on the markets candy and my mind and stomach (literally) appreciate this. Trading is constant whirl of emotions that need to be contained. If I can work in some way of eliminating emotions and controlling my mental trading state I find it always necessary to do so. It makes my next decision a little bit easier to make and helps to calm me down as I analyze. Iím already in a better position than I was just a few moments ago and a profitable trade is all but guaranteed if Iíve eliminated any risk on final positions.

Strategy Isnít About A Better Trade Rather Proactive Trading Emotion control

So I donít assume that taking initial profits creates better trades, but it helps to create better decisions. As much as a trader believes they arenít being affected by their emotions, they are. I make no reasoning for me having no emotions because I feel the same as any other trader. The difference is I take proactive steps within my trade position to allow better decisions. I donít want my decisions to be based on factors that I could have controlled. When I see price sky higher without that extra contract Iíve come to the point where I have hardly any emotions towards it. Iíve seen an equal amount of scenarios play out in the markets in both directions thus initial risk off targets make for profitable trading consistency.

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It is our hope that you are truly able to gain some value from this approach to trading education. To best take advantage of this site it is important to truly understand concepts and not fall into the trap as most traders. This trap being moving on from strategy to strategy before you master it. Don't become a aware of many things and a master of none!

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