Sometimes trading is tough. When markets are moving quickly, they can put your head in a spin and when you factor in the strong emotions that are

likely to show up at these times, it’s no wonder that traders often end up tying

themselves in knots.

So employing a strategy that leaves no room for ambiguity is hugely

advantageous. If there’s an entry, you can take it (or not). You know where you’re exits are and you know where

you’ll take a loss .

Although there will be times when you can sense that a trade isn’t absolutely

perfect, there are some strong arguments for mechanically defining

your ETS (entries, targets, stops). Here are 4 of them: -

CLARITY

Knowing exactly what a trade looks like and where your ETS are is a huge

advantage. Trying to figure out these details as markets are moving and often

with very little time to act, is possible but at the same time it can also be tricky.

If you have a concrete way of identifying these key prices, you can focus your

attention on figuring out what the market is actually trying to do and decide on whether or not you take an entry. By

removing a decision step each time you trade, the confusion lifts and a clearer

picture of the market can emerge.

REPLICATION

By knowing what your ETS are before taking your trades, you’re able to improve your ability to replicate performance over time. Although

conditions are not always going to be the same, having an execution system gives you solace

when your exit price gets missed by a few prices or even if it runs straight through your targets.

Without a system you can always blame yourself for making the wrong

call. With a system, you know that these things can always happen but it’s

okay nevertheless.

PERFORMANCE IMPROVEMENTS

Without knowing what you’re trying to achieve, trades can become a little bit random. So even if you are keeping a

good trading journal, it’s hard to figure out what and why something is or isn’t

working.

Knowing exactly the types of trades that you take gives you a far better

chance of identifying key performance details and incrementally improve your

trading results.

Not only that, but if you are manually trading you can very clearly define

what a trading error looks like – and remember, trading errors account for a large part of why traders are unable to

maintain consistent profitability.

AUTOMATION

Some people love automation and some people hate it. But if you’re able to mechanically define a trade and add

conditions to taking a trade, it becomes possible to automate a

strategy if you choose.

Although there are weaknesses to automation, it can make up for them by trading a robust system in multiple markets. Plus the fact that even if you want to trade manually, automation allows for trading rules and inputs to be back-tested far more efficiently.

If you have a strategy that you know is good but you haven’t been able to translate it into profits so far, ask

yourself whether you need to define some clearer rules of how to trade it.

If you don’t have one, take a look at some of the great strategies Netpicks has got to offer:

www.netpicks.com

www.premiertraderuniversity.com

Clarity in trading is golden and by taking the guess work out of ETS, you’ll be well on your

way to achieving it.