Monday, March 15, 2010

Making big profits

I know that I have only been documenting my trades for just over three months now. None the less, the fact that I have managed to stay profitable each month thus far can not be ignored. Anyways I am not writing this post to brag or anything. My goal is to illustrate how big profit years are constructed.

Although I have been profitable, so far I have not really had any blow out trades. But by cutting loses and taking profits in the region of 3 - 4R I have managed to keep my head above water. What I am really holding for is the handful of trades that will yeild in excess of 20 - 25R for me. Those home runs that can double or triple my account. By staying disciplined and keeping my equity line near its highs when these trades come along they can really propel my account higher.

That is essentially the secret to big profits. If you read the books of those traders who have gone to great lenghts of documenting their trades like Nicolas Darvas in How I made 2 Million Dollars, or look at Timothy Sykes website and his documented trades, you will notice that it is a handful of trades that account for most of the profits while the rest are either breakeven, small loses or small winners.

Most people like to say that these traders have been lucky while singling out the few big winners. However, you have to put yourself in the position to be lucky first before you can be!

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