# General Trading Tips

Tips that apply across **Technical Analysis**, **Fundamental Analysis**, and **Options**: routine, risk, journaling, mindset, and how to combine the three disciplines.

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## 1. Routine and Preparation

* **Pre-market (daily):** (1) Check **higher timeframe** trend and key levels. (2) Note **session** (Asian/London/NY) and **news** (economic calendar). (3) Mark **support/resistance** and today’s bias. (4) Set **max risk** for the day (e.g. 2% total). Same routine every day reduces impulsive decisions.
* **Pre-trade (every trade):** (1) State the **setup** in one sentence. (2) Define **entry, stop, target**. (3) Calculate **size** from risk%. (4) Confirm you’re **calm** and not revenge/FOMO trading. If any step is missing, don’t trade.
* **Post-market:** (1) **Log** every trade (setup, P\&L, emotion, rule break). (2) Quick **review**: win rate today, any pattern (e.g. “lost when I traded first 15 min”). (3) **No** new analysis or “one more trade” after you’re done. Close the platform.
* **Weekly:** (1) Review **journal** (win rate, average R, rule breaks). (2) Note **what worked** and **what didn’t**. (3) One small **adjustment** if needed (e.g. “no trades first 15 min”). Don’t overhaul the plan every week.

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## 2. Risk and Position Sizing

* **One number:** Pick **one** risk per trade (e.g. 1%) and **never** exceed it. No “this trade is special so I’ll risk 3%.” Consistency beats occasional home runs.
* **Stop before entry:** If you don’t know where you’re **wrong** (stop), you don’t have a trade. Define stop **before** entry; then size so that (entry − stop) × size = risk% of account.
* **Max daily loss:** Set a **daily loss limit** (e.g. 2% of account). When hit, **stop trading** for the day. Prevents revenge trading and runaway drawdowns.
* **Correlation:** If you have 3 longs in the same sector, you have **concentrated** risk. One bad day can hit all three. Diversify across sectors or reduce size per name.
* **Leverage:** More leverage = **faster** blow-up when wrong. Use leverage only when you’re experienced and have strict risk rules. Beginners: minimal or no leverage.

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## 3. Journaling and Review

* **Log every trade:** Instrument, timeframe, setup type, entry, exit, stop, target, **P\&L ($ and R)**, date/time, **emotional state** (calm, fearful, greedy, revenge), **rule adherence** (yes/no; if no, what broke). Takes 2 minutes; pays off in pattern recognition.
* **Weekly metrics:** Win rate, average R (or avg win vs avg loss), number of trades, **rule breaks**. Track whether you’re following the plan. If rule breaks are high, simplify the plan or add a single constraint (e.g. “no trade 30 min after a loss”).
* **Monthly:** Expectancy (avg R per trade), max drawdown, best/worst trades. **By setup type**: e.g. “pullbacks 60% win rate, breakouts 40%.” Double down on what works; reduce or drop what doesn’t.
* **No blame, no excuse:** Journal is for **learning**. “Market was manipulated” doesn’t help. “I placed stop at obvious low—next time I’ll use a buffer” does.

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## 4. Mindset and Psychology

* **Accept losses:** Losses are **part** of trading. Even 60% win rate means 40% losses. One loss doesn’t mean your system is broken. Judge over **many** trades.
* **No revenge:** After a loss, the urge to “get back” is strong. **Rule:** No trade for 30 min (or rest of day). Revenge trades usually lose more.
* **No FOMO:** Missing one move is **okay**. There will be other setups. Chasing usually means bad entry and quick stop. “No trade” is a valid outcome.
* **Confidence vs overconfidence:** After a **winning streak**, don’t increase size or relax rules. Stick to the same risk% and setup criteria. Overconfidence leads to blow-ups.
* **Trading is a marathon:** Focus on **process** (did I follow my plan?) not **outcome** (did I make money today?). Good process over time leads to good results.

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## 5. Combining TA, FA, and Options

* **FA for “what”:** Use fundamentals to **screen** and **rank** ideas. Only consider names that pass your quality and value filters. Avoid trading (especially options) on names you wouldn’t own as stock, unless it’s a defined short-term trade.
* **TA for “when”:** Use **technicals** to time entry (e.g. pullback to support, breakout with volume) and to set **stop** and **target**. Don’t buy a “cheap” stock without a technical plan—you may sit in a drawdown for months.
* **Options for “how”:** Use options to **express** the view (call/put), **limit** risk (spreads), or **hedge** (protective put). Don’t use options to **override** a weak FA or TA thesis—they amplify mistakes too.
* **Example workflow:** (1) FA: Stock is undervalued and high quality → on watchlist. (2) TA: Wait for pullback to 50 EMA and bullish engulfing → entry zone. (3) Enter stock or buy call; stop below support; target next resistance or FA-based price. (4) If using options: choose expiration that matches expected time to target; size by max loss.

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## 6. When Not to Trade

* **After a big loss:** Pause. Don’t trade to “get back.” Wait until you’re calm and the next setup is **clear**.
* **When you’re emotional:** Angry, anxious, overexcited, or tired. Close the platform. Trade another day.
* **When there’s no setup:** It’s okay to have **zero** trades in a day or week. Forcing trades kills edge.
* **Before major news:** Unless you’re intentionally trading the event (with a plan), reduce size or stay out. Gaps and whipsaws can hit stops or trigger assignment.
* **When the plan is unclear:** If you’re “figuring it out as you go,” you’re not trading—you’re gambling. Step back and wait for a setup that matches your **written** plan.

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## 7. Continuous Improvement

* **One change at a time:** When you improve your process, change **one** thing (e.g. “add 30-min pause after loss”). See the effect over 20+ trades before changing again. Multiple changes at once make it impossible to know what worked.
* **Study your losers:** Review **losing** trades more than winners. Were they bad setups (shouldn’t have entered)? Bad execution (moved stop, didn’t take profit)? Bad luck (good setup, stopped out)? Learn from each.
* **Study your winners:** What did **winning** trades have in common? Same setup type? Same session? Same R:R? Do more of that.
* **Keep a trading plan document:** **Written** rules: what you trade, when you enter/exit, how you size, when you **don’t** trade. Update only after **review** (e.g. monthly), not in the heat of the moment.

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## 8. Quick Reference Card

| Do                                  | Don’t                                                   |
| ----------------------------------- | ------------------------------------------------------- |
| Define stop before entry            | Enter without a stop                                    |
| Size by risk% (e.g. 1%)             | Size by “gut” or to “make back” a loss                  |
| Log every trade                     | Skip journaling after a bad day                         |
| Wait for clear setup                | Chase or force trades                                   |
| Follow your written plan            | Change rules mid-trade or when emotional                |
| Use FA for selection, TA for timing | Trade on one discipline alone (unless that’s your edge) |
| Pause after a loss                  | Revenge trade                                           |
| Cap daily loss and trades           | Trade through a bad day with no limit                   |

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*See also:* [*Master Summary*](https://nishchalnishant.gitbook.io/trading/readme/summary/master_summary) *|* [*Trading Setups Checklist*](https://nishchalnishant.gitbook.io/trading/readme/revision/trading_setups_checklist) *|* [*Trading Psychology*](https://github.com/nishchalnishant/TradingOverview/blob/main/stock-market-analysis/technical-analysis/handbook/09-trading-psychology/README.md)*.*