New Trader,Rich Trader 2: Good Trades, Bad Trades pdfdrive com

INTRODUCTION
There are many questions that a trader has to answer before entering a trade.
There is a big difference between a good trade and a bad trade. The primary
difference between good traders and bad traders is that good traders consistently
make good trades, while bad traders make consistently bad trades. A good trade
does not always make money and a bad trade is sometimes profitable. However,
this does not change the definitions of right and wrong, good or bad. Trades
should be measured by the quality of the reasoning for taking them. If traders
consistently take trades that exercise their edge over the markets, they will make
money in the long term. The worst thing that can happen for a new trader is
being rewarded for a bad trade. This short-term win can result in long-term
failure when his luck runs out and the market changes.
My purpose and goal in this book is to show the reader the difference between
a good trade, one that is made inside the parameters of a trading plan with an
edge, and a bad trade that is emotionally based on greed, fear, or opinion. In the
long term, traders are a success or failure based on the quality of their trades.
The creation of bad trades is easy: trade your opinion, trade big, don’t cut your
losses, just hold on and hope. Bad trades fight trends; they put out a lot of money
with the risk of making little. The entry and exit signals for bad trades are hope
and fear, with the ego stepping in and refusing to honor the stop loss.
Good trades require work. The right trades come only after doing the required
homework: chart studies, researching historical price action, or back testing
along with research of chart patterns. In markets, price action can stay inside a
range or they can trend. The job of the trader is to discover how to profit from
these patterns over the long term. Trading price action is only the first part of a

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good trade; without risk management and discipline no trade is a good trade.
The purpose of this book is to take the reader through the principles and the
differences between good trades and bad trades.

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