I'm not personally giving away my personal style of trading based on years of refining it and just a few months of finally noticing something that repeats itself for money. I will discuss about what I think goes into successful trading from all the reading I have done in years.
First off, it's to understand the indicators that are going to be used. The most common method from traders based on a survey from a live web seminar I watched said moving averages. There are so many different types of indicators out there but mainly there are two things- it's leading and late indicators. The leading indicator can cause the market to give early tells and possibly cause a lot of frustration because there are also false signals and lots of money getting lost. The late indicator lets one know when a trend has been set and maybe it could be the end of a trend and cause some more money to get lost, along with wishing the trade was made earlier!
Okay, so it's not really fun trading because it looks like there's always going to be a gamble either way someone goes. Basically, it comes to learning most of the tools of the trade and sticking to personal comfort level and continuously trying to refine the skills by testing them. Step one of what's needed goes to learning to do proper analysis, no matter how it's getting done. Whether the trader looks at the news or charts for setups as long as it's consistent enough to make a profit.
The second thing that's needed is a proper reward-risk ratio. In a way, I don't find this to be accurate at all because the markets are always fickle but it's more like an incentive to get into a trade and recognizing something similar to it. It's like one of the more highly probable trades that can ring in the big bucks. A good reward-risk ratio to look for is 2 to 1. So placing in a $2 bet will net $4. To break even with these trades, the winning number of trades can never be below 33%. It's a lot easier to break even with this risk-reward then going for something like 1 to 3. It's really ugly because trading is hard and losses take place and making only $10 while risking $30 will mean that the trades need to be 75% accurate to break even. I like seeing big money while waiting it out in a risky market, but some traders are different. Next step is to determine how you will find the acceptable level of reward-risk ratio.
The last thing is to determine the entry and exit points. Timing is everything in trading and being off by an hour can mean a huge loss compared to that payday you were expecting from your analysis. To tie all of these things together, it requires a lot of practice and learning to be consistent at it. If the trades can be profitably made for three months straight, then I believe it's time to take it live. Still, it's a risk that you would be taking because anything can happen in the markets so a lot of resiliency would be required with the swings that could take place.
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