A key component to successful trading is proper money and risk management

A key component to successful trading is proper money and risk management

Traders, in general, spend far too much time and effort trying to find magical systems or methodologies that produce high returns, rather than increasing their understanding of the markets and using astute money management to apply what they learn.

A key decision a trader need to make is frequency of trades and size o trade and stops on those trades.

One way to make money is by using larger stops , smaller position size and longer hold periods (trend following , buy and hold)

Another way is larger stops , larger position size and longer hold period ( shoot for the moon strategy advocated by some traders)

Third way is tight stop , medium to large position size and short holding periods. The momentum burst and anticipation strategy falls in that category. For that you have to be willing to do lot more trades.

I use fixed size of 1000 to 5000 shares based on price of stock. And stops around 400 dollars irrespective of price of stock. I move my stops to breakeven once in profit . And after that trail largely less aggressively in the beginning but very aggressively once I have over 1000 to 4000 dollars profit based on stock price. I do hundreds of trades in a year. 

The number one priority for my approach is to find a setup where stop can be very tight and that works instantly after entries. Magnitude moves is what I am interested in not in duration moves.