Regarding the activity we are all engaged in, i.e Speculation. Some of my thoughts and personal experience –
There are foundational concepts to trading and speculation.These concepts transcend methodology. They transcend strategy or approach.
They are the bedrock of any and all successful speculative activity, whether that be at the poker tables of Monte Carlo or in the futures pits of Chicago.
Here is what I have learned in my many years as a speculator. I hope it helps.
1. No-one knows the future even though everyone thinks they do
2. What the speculator does or does not do after the entry determines the outcome of the trade.
3. Strategy is the least important of all the skills needed to successfully speculate
4. The most important part of the trade is the risk management part.
5. The dollar/currency risk amount of the trade is more important to know, compared to the size of the pip/tick size between entry and stop
6. Trade management is the most important skill a trader can learn and develop
7. Once a potential trade is identified, the methodology has done its job and retires. The trade management must now take over and decide how much size to put on which in turn is determined by how far away the protective stop is from the proposed entry. The trader that gets this wrong is the one that loses, always.
8. If the trader does not determine the most appropriate exit, the market will get him/her out at the worst possible price or worse
9. The successful speculator never gives a singular trade or set of trades the power to take him out of the game. He never relinquishes that power to the markets but reserves it for himself
10. The successful trader makes routines of the best practices that encompass the most important parts of the trade and so develops consistency which in turn leads to victory.
Be careful what you think because your thoughts run your life..Solomon