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Your methods are under your control

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Methodology trumps the market. The market is a unknown variable, it does its own thing, you cannot control it.

Market is ever changing.

Market is full of surprises.

Market is not predictable all the time.

Market is complex.

Market offers too many choices.

Market is full of traps.

Market is not controllable but.....

your methods are compltely under your controll. Your reaction to the market is under your control. What you can control is your own method to trade the market.



Trading decisions fall in to five "controllable" categories which I call Trading Mix:

1. What time frames to trade (trade frequency)
  • Day trade
  • swing trade
  • position trate
  • macro trade
2. What markets to trade (equity selection)
equity
growth
momentum
value
technical analysis
futures
options
currencies
etf

3. When, where, and how to enter them (entry selection)
4. When , where , and how to exit them (exit selection)
5. How to manage risk (risk management)
how much to risk per trade
where to put stops
how and when to use margin

The profit opportunity is in the market if you get the mix of above elements right the result is profit. Each of these five variables are completely under your control.
If you change these variables your profit increases or decreases. So for a same size of profit opportunity in the market two traders using two different set of trading mix will have completely different profit outcomes. Controlling your trading mix is the key to profitability.
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