5 Benchmarks for a Profitable Strategy
Posted on July 1, 2010 by Steve Primo in *TODAY'S STOCK SETUPS, Steve Primo, Trading Lesson
5 Benchmarks for a Profitable Strategy
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I am constantly asked what makes a good trading strategy. Do I look for a strategy that consistently makes small profits, or one that hits a home run once a year? Should I really worry about the method’s components and how it was constructed, or just stick with it as long as its making money? Because in the end, it’s really just about making money, right?
Well, the answer to all these questions is yes…and no. There are several elements that one can use in order to construct a trading plan, but in the end the key to a successful strategy is not how many components you use – but whether you’re using the correct ones. The problem is that most traders/investors have been taught to focus on the wrong components, which eventually results in losing trades. Here, we try to keep things simple. We require only 5 main benchmarks to be at the root of all our trading strategies. They are:
- Trade with the Trend
- Enter on Pullback
- Wait for Confirmation of the Trend before entering
- Only Trade with the correct amount of shares
- Always Trade with Stops
It is our opinion that each of these categories must be employed in order to have a successful trading strategy. All of our students are taught strategies in the Stock, Emini, and Forex markets that rely and have been built upon these components.
In my next column I will go into full detail regarding how to use one of our most important tool’s for trading with the trend – the BUY / SELL Line.
Good luck and good trading,
Steven Primo
www.specialisttrading.com
stevenprimo@specialisttrading.com
For questions on this article or Steve Primo’s Trading Courses email us at sales@globalchartanalysis.com
