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Kinetec Securities Successful Trading Guidelines
Kinetec Securities Successful Trading Guidelines
Kinetec Securities Traders have developed lots of rules over the years in an attempt to refine the way they make trading decisions. So here is a list of 5 trading guidelines that can be part of a trading plan. These guidelines have been selected for their broad appeal to many types of traders. They are presented in no particular order of importance.
Sydney,
NSW,
Australia
(prbd.net)
01/05/2010
"Kinetec Securities Traders have developed lots of rules over the years in an attempt to refine the way they make trading decisions. So here is a list of 5 trading guidelines that can be part of a trading plan. These guidelines have been selected for "
1. Don’t trade markets about which you know very little about.
This is not to imply that you have to be a fundamental expert on every market you wish to trade. However, you should know about what fundamentals are impacting, or could impact, a market you are contemplating trading. For example, a person who has only traded the stock market would not want to jump right into a 3-year Bond futures trade without first doing a bit of homework on how the bond market trades – price increments (dollar amount per tick), trading hours, on what exchange the market trades, etc.
A trader could pick up a Financial Review and read the “Bonds” section for a week or so to become familiar with fundamental factors that influence the bond market. Also, consider this: Most traders enjoy the process of trading. If they did not, they would likely just hand their money over to a “fund manager” and give the manager control over their money. Learning and knowing what fundamental factors are impacting or could impact a market that a trader plans to trade is part of the process (enjoyment) of trading.
2. Don’t trade hot “tips.”
You may trade for 20 years and never hear a good trading tip. Reason: There aren’t any.... at least not any that are any good for regular individual traders. Markets are way too big and too tightly regulated to be impacted by any tips or inside information. Any legitimate “early information” has almost certainly already been factored into the market price structure by the time most individual traders could ever benefit from it.
Don’t confuse tips with rumours. Markets do move on rumours more than just occasionally. Rumours are a part of trading but still fall into the category of “not much use”. Besides, many rumours are never confirmed as fact and are often self-serving to those who try to start them.
3. Don’t get too fancy with your market orders.
Entering a trade “at market” with a market order may be the best way to enter a trading position, especially in markets that are liquid (have high open interest). It’s certainly the easiest way to enter. Fiddling around with limit or stop-limit or other multi-step orders to save a tick or two or three can cost a trader a good entry point or even a missed trade altogether.
It’s certainly easy to be guilty of this offense because every trader is always trying to get just a little better price. This doesn’t mean that limit or stop-limit or other types of orders are not useful in certain circumstances because they are. However, most trade entries are best made “at market.”
4. Don’t form a new market opinion during trading hours.
This rule goes hand in hand with the rule that says you need to stick to your trading plan. Day-to-day market “noise,” or the minor up-and-down price fluctuations of a market, can be at the very least a distraction to traders and at most prompt traders to make a hasty and poorly founded trading decision.
5. Don’t force trades; if you don’t see a trade, stand aside.
Don’t chase a market just to put on a trade. Try to exhibit patience and discipline in trading – easily said but hard to follow. Patience and discipline are not easy virtues for any trader to learn because a typical trader has a “Type A” personality with a competitive nature who hates to wait in lines. However, to have even a chance at success in trading, you have to control your impatience. If you happen to miss a trading opportunity because you waited too long, other trading opportunities will come along.
Company Name: Kinetic Securities
Full Contact Details (Street Address, Phone Number, Fax, Email, etc.)
Kinetic Securities Pty Ltd.
Level 9, 23-25 O’Connell Street,
Sydney NSW 2000 Australia.
Phone +61 2 9295 9800
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Fax +61 2 9295 9890.
Web: www.kineticsecurities.com
Email: info@kineticsecurities.com
Kinetic Securities Pty Ltd
(ABN 83 120 225 149) holds an Australian Financial Services License (AFSL No. 309743)
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http://www.kineticsecurities.com
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