Savvy trader in the making

'To achieve consistency, one must be willing to stick by the rules within the trading plan, especially cutting losses when the market turns against one's trades. Over time, one manages the downside by taking small losses in some trades and allowing most winners to ride the trend as long as the market decides. In other words, keep in mind that taking care of the downside is our job; and the upside is the market's job.'
Mr Lee has designed a proprietary trading system to track the price movements of stocks and derivatives. The system generates buy and sell signals.
This brings us to the issue of risk control, a discipline that often falls by the wayside when emotions run high. Sticking to a trading plan is itself a form of risk control.
Adam Sprague, director of OptionsXpress says: 'Traders use strategies that limit their risks, while taking advantage of price volatility. A successful trader needs a good trading plan to identify and limit the risks with each trade. The key benefit of the plan is that it helps to take any emotion out of trading. Even before entering a trade, the trader must know what their exit points are for both the profit and loss.'
He adds: 'Problems for traders often arise when they have a plan, but they start to bend their own rules, such as adjusting the profit and stop levels.'
OptionsXpress offers a self-directed trading platform and free online education on products including stocks, options and futures