Yanlord is no go

Alright, Yanlord broke support at 1.24, displayed further weakness by knocking on the support repeatedly before plunging to 1.17 with an intra-day rebound to the support level again. It ends this week at the support level of 1.24. Well, well... I will skip this trade.

For those with itchy fingers who bought at cheaper prices. Well why did you buy on weakness? Did you have any statistical evidence or other compelling reasons to buy? If not, you are gambling, pure and simple. I am not saying it is wrong. But most gamblers end up in the poor house.

I buy on strength, because I have done my homework in reviewing my system and found positive expectancy for trades like these. And it is a lot of hard work. 19 out of twenty times, the promising system I envisioned falls flat with negative expectancy over the long term. And that is painful. Trading is 'painful' and a lot of hard work. My best forex strategy trading at the moment is painful. Its win rate is 35%, meaning I expect to lose most times I trade. It helps that it is automated of course. It helps that I know in the long term, it has a good positive expectancy.

Fact No.1 : systems or mechanical trading is very much like testing to find a light-bulb that works.
Fact No.2:  successful trading is not about winning but about making your money grow.

Targeting Yanlord for a buy

I will buy if Yanlord goes up to 1.3 in 3 days time. Otherwise I skip. Yanlord has an obvious support at 1.24, broken to the downside. I am trading on the premise of a false break.

Plus points:

• General uptrend now at support going back to October last year. 
• Potential triangle breakout to the upside following a false break of resistance

To summarise:
Trigger to buy : 1.3
Stop Loss: 1.21
Target: 1.48
Risk 9cts per share

Suppose I have $20,000 in trading capital, my 1% risk is $200. I buy 1000 shares or 1 lot and if I lose the trade at 9cts ie. it goes down to 1.21, I lose $0.09 X 1000 = $90. Add in commissions of roughly $60 to buy and sell and you have a loss of $150.

If you do not understand, please do not trade. A little knowledge 'half cooked' is dangerous to your financial health. Becoming successful in trading is like taking an MBA course. Please do not think otherwise.You can always do your due diligence to educate yourselves with trading books of real value like those I listed.

If nothing else, just learn from me that limiting yourself to a 1% loss per trade will save you from inevitable sleepless nights and big losses further down the road.