Understand first who you are as a trader. Do you like to daytrade? Do you prefer swing trading? What is your risk tolerance level? Everyone has a unique style and situation.
As a result, what might be a great entry point for a swing trader may turn out to be a not-so-good entry for a Day trader…? A trader with a low tolerance of risk might find that trade far too risky.
The key here is to know why you’re entering a trade, what it would take for you to exit (stop loss) and an appropriate target. These should all be determined BEFORE you enter the position. Many unsuccessful traders have one or two of these criteria figured out before they enter the trade. It’s the third one that derails them.
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