The most important is risk management. It is the first and important part of the trading. Plan in advance that how I will manage my risk. I manage my risk by
- Add stop loss with the buy/sell order.
- Stick to the stop loss and don’t change when market going against you.
- In case of options, think in advance, how will I hedge my position and when will I close my position.
Trading based on Pivot Points
- First check for the Market trend. If it is down trend then there are less changes to break resistance.
- If market is in up trend, then there are less changes for break support. In most of the cases, market may bounce back from support.
- Another factor to consider at Pivot point is RSI level. In case of over bought situation, market may go down after touching resistance.
- In Bull Market never sell and in bear market never buy.
- If you missed the trend then wait for next signal to enter.
- Do not risk more than predefined price per day, per week and per month.
- Your decision should not be influenced by external factor. Stick to your trading system.