Trading FAQS

Why people are attracted to trading?
  • It provides autonomy (you are your own boss)
  • Flexibility of space and time (can trade from anywhere, anytime)
  • Very limited entry barriers (easily available platforms, start trading from $500, no qualifications…)

Hence for safe trading you need to set safeguards- rules and boundaries

  • Contradictory beliefs and nonfunctional awareness          
  • Storage capacity vs learning capacity
  • Unwillingness to create rules
  • Failure to take responsibility- you break rules
  • Addiction to random rewards

Most people are not disciplined and function better with external controls (mentor/HXT warning) vs internal controls(market)

Winners10% (consistent wins), losers40% (consistent losses), boomers and busters 40%(don’t know how to keep money)

  • Have clarity on which trades you will take and how(tried and tested edge – HXT trades have min 80% win rate month on month since last 2 years- HXT log link)
  • Have defined profit targets/stop losses/risk appetite for the trade/day
  • Have strict timeframes (intraday/ swing longs/ swing shorts)
  • Are open (anything can happen in the market, wins and losses are random, every trade is unique)
  • Check progress and reinvent themselves (awareness of market trends, ebbs and flows of a stock…)

You do not need to know everything; you need to know your edge and should be disciplined enough to execute on it consistently

  • Strengthen your self-discipline (learn from the master traders)
  • Taking responsibility (learning from your mistakes)
  • Consistent profit (check losses and add to your wealth every day)
  • Skills of trading (learn technical, indicators, patterns…)
  • Get into the flow (enter every trade with a carefree mind)
  • Disciplined(Do more of what works for you and less of what doesnt)
  • Fearless(Plays within the risks and enter trades freely)
  • Sound System(Have a solid APlus/Swing Long/Swing Short setups)
  • Flexible(Ability to check themselves, adapt to the market, adjust to patters)
  • Keep it simple(NO to 
  • Too many rules
  • Deep technical analysis before every trade
  • Constantly trying to guess market movement)

1. Fund your trading account with money you can afford to loose

  • You can take every trade without any worries
  • Grow and build your savings
  • Retire when you are ready

2. Have a sound trading setup

  • Min 2 screens with good resolution
  • Access to news, top moving tickers
  • Time to take right entries and patiently wait for the profit areas

3. Choose the right mentors and avoid

  • Traders who take 1 magical trade every day/ every month
  • Traders who promise the moon
  • Traders who trade for 15 mins and make millions
  • Traders who give trading advice but never take any trades

4. Create your winning system

  • Design your edge with higher probability of wins
  • Follow your edge and sharpen/refine it as necessary
  • Have disciplined approach in following your edge(check yourself if you deviate from your edge
  • Most traders lose by taking profits quickly and being too patient with losers
  • Having a profitable system is only half the battle, following it is the hardest part

1. Treat trading like a business, not a hobby or a job.

  • Set aside time, money and other resources for trading
  • Take every trade like a new trade without baggage of last trades wins/losses
  • Set realistic expectations

2. Keep on learning then learn some more.

  • Evaluate your trades and strategies daily
  • Have a mentor or a guide to check your progress
  • Join good groups to learn and share

3. Take advantage of technology   

  • Choose right trading platform most suitable to your trading style
  • Create shortcuts, use indicators, charting patterns
  • Getting right news early

4. Develop a factual methodology   

  • Define and test your strategy
  • Test using paper trading tools if you are not sure
  • Borrow strategy (tried and tested from a great mentor)

5. Protect your capital and don’t risk what you can’t afford to lose 

  • Trade money which you can afford to loose
  • Set target to make and loose on a ticker and in a day. Follow these in disciplined manner
  • Don’t fall for money making scam trades and quick wins

The risk-reward ratio is a measure of potential profit to potential loss for a given investment or project. The risk/return ratio helps investors assess whether a potential investment is worth making. A lower ratio means that the potential reward is greater than the potential risk, while a high ratio means the opposite. By understanding the risk/return ratio, investors can make more informed decisions about their investments and manage their risk more effectively.

Risk/Return Ratio = Potential Loss / Potential Gain

If an investor prefers to seek a 1:3 risk/reward ratio for a specified investment, then they can modify the stop-loss for every trade order and thus adjust the risk/reward ratio. Just to summarize, for every 30 cents win they can take 10 cents loss.

Risk/return ratio can change over time as the investment’s price moves its potential risk changes. For example, if a stock’s price goes up, the potential reward may become less than when it was initially purchased, while the potential risk may have also increased.

For HXT members, we don’t go into the trades unless we see a potential of at least 1:3 risk/reward for any trade. Also as soon as we enter a trade we set up stop-loss to 10% and profit target of at least 10% for 70% of the shares. 

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info@hammerxtraders.com

Location

Indian Trail, North Carolina

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