Teach Talk Trade Day Trading & Technical Analysis

All trading systems have different parameters and conditions that are required prior to executing the trade. You will not find a perfect condition for a trade, it would be nice if we could! You will have more success with the trade depending on the number of conditions that are in alignment. The trader will have to a handle on executing trades that do not have perfect conditions. Trading is an art not a science. You need to recognize when the conditions arise in which a higher percentage of conditions are met and you are able to execute the trade. Yes there is some fear that creeps in for most people when they have to execute on a less than perfect conditions. Knowing the trade’s odds can help a trader evaluate risk and adjust position accordingly. If only 80% of conditions in the trading system exist, the trade has less odds of success than a trade that has 100% of conditions and should be traded differently.

If all trading conditions exist, if all indicators are lined up, the trade has certain odds of success. If not all indicators are lined up correctly, the trade has lower odds of success. Below a certain level of odds, the trade should not be taken.

Thinking in Odds

Most traders have serious problems thinking in odds because it is against our nature to take on a position without being 100% sure that it will be a success. Losing hurts, it is painful, taking a position knowing that there is a chance of loss is usually avoided. Traders want to “know” what is going to happen and therefore look for the black and white in trading. Black and white do not exist in trading.A trade can be right and still lose. All indicators can be aligned and the trade can still lose. Even if the system is 99% accurate, there is still a chance that the trade will be a loss. Most traders are unable to accept this and it causes frustration. By learning to think in odds, a trader can both vary their trading according to odds of success and accept losing trades a lot easier.Please take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Energy issues ) & The Mechanical Monkey where we discuss our mechanical trades.