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The Alert-Trading trading system - Why is one trader successful and another one is not? Why is one trader constantly making money and the other one constantly losing? Why is one making a fortune while the other one is losing it? The answer is that successful traders
have a working trading system. Many don’t even have a system, they
just trade, hoping they are right. They are gambling, not trading.
Like in any successful business you must have a plan. You must exactly
know what you are doing and why you are doing it. You must have
control over what you are doing. Every successful business starts with an idea, something you think you can make money with. Based on the idea you make a business plan. Once you have the plan you start your business. It’s the same in trading. First you must have an idea, something that earns you money. In daytrading the business idea is a trading pattern. Once you have found a good pattern you can make the plan. Once you have the plan you can start the business, you can start trading. In daytrading we understand a pattern as a situation that repeats itself over and over again. For example: We see the stock ABCD open higher every morning, then selling down one point. We see ABCD doing this since two weeks every morning. We have obviously found something that repeats itself over and over again. We have found a pattern, something we can use to make money. So, our idea is: If I will see the stock ABCD open higher tomorrow again, I will go short on it because I expect it to sell down one point! Once we have found a pattern we start to make a plan: How can I make money with this idea? Go through each step of the pattern and pay attention to each single step of the trading process. Shall I short the stock before the open or shall I wait for the open? How do I know if the stock opens higher? Shall I watch pre-market activity, is it important? Is the stock shortable at all? What is the best way to get filled? When and where do I cover? What if the stock doesn’t go down? How big is the risk? How do I handle delayed quotes at the open? Is my broker fast enough? Are my execution skills good enough for trading this pattern? Etc. Once you have made the plan and you have answered all the questions you can start. We recommend to paper trade first. Watch the stock in real-time and …
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