RSI 60/40 strategy: no need for insanely complex indicators pt 4
The 2 major issues with all trend trading systems =
1. whipsaw = or when signals fire but are immediately reversed = you could be wrong
2. A smart entry hardly ever looks like a "good entry". = you feel dumb
How to avoid:
1. trade size and stop losses = risk management = Expect whipsaw and plan for it
2. Trade size and stop losses = risk management = know how much you stand to loose; if that number makes you sick, dial you risk back about 90%.
3. but 1 & 2 are the same, you say? ... yep RISK MANAGEMENT removes both the emotional strain and the need to be right.
1. whipsaw = or when signals fire but are immediately reversed = you could be wrong
2. A smart entry hardly ever looks like a "good entry". = you feel dumb
How to avoid:
1. trade size and stop losses = risk management = Expect whipsaw and plan for it
2. Trade size and stop losses = risk management = know how much you stand to loose; if that number makes you sick, dial you risk back about 90%.
3. but 1 & 2 are the same, you say? ... yep RISK MANAGEMENT removes both the emotional strain and the need to be right.
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