Successful investing isn’t about having the “perfect” strategy.
It’s about the rule you abide by with each trade.
Many fail to use stop losses, or even protect gains with a simple trailing stop loss strategy. Others risk far too much.
As we all know, that kind of risk can be a disaster if everything goes the wrong way.
It’s why checklists are essential with trading.
- With your next trade are you aware of your risk tolerance level?
- What are your set stop losses?
- Do you know when to walk away from a trade?
- What are you expectations from the trade, your target prices?
- Are you trading on emotion? If so, rethink the trade.
- Are the bulls or bears currently in control of the stock in question?
- What kind of news is currently impacting my trade positively or negatively?
- How has the herd been reacting to a stock?
With each trade, ask yourself these key questions.
The more informed you are about the opportunity. Avoid such questions and you invest blindly. And as we all know that’s not a good idea at all.
Failure to plan can – and oftentimes will – lead to unnecessary loss.
Plan ahead and you’re ahead of the game.