Your stock dealing rules are your cash. When you follow your rules you make money. However if you break your own securities trading rules the likeliest outcome is that you'll lose money.
When you've a trustworthy set of securities dealing rules it's really important to keep them under consideration. Here is one discipline that will harvest rewards. Read these rules before your day starts and also read the guidelines when your day ends.
Rule 1 : I must follow my rules.
Naturally if you develop a group of rules they are going to be followed. It is human instinct to need to change or break rules and it takes discipline to act as agreed by the established rules.
Rule 2 : I can don't risk more than 3% of my total portfolio on any one stock trade.
There are many old traders. There are many bold traders. But there are never any old bold traders. Protecting your capital base is fundamental to successful stock market trading over time.
Rule 3: I will cut my losses at 5% to 15% when I am wrong without question.
Some traders have an even lower tolerance for loss. The key point here is to have set points (stop loss) within the limits of your tolerance for loss. Stay informed about the performance of you stock and stick to your stop loss point.
Rule 4 : Never set price targets.
This is a fashion that will let me get the best out of rising stocks. Simply let the profits run. Realistically, I'll never pick tops. Never feel a stock has risen too high too fast. Be ready to give back a good share of profits in the hope of much larger profits. The gigantic cash is made of trading the truly Large moves that I am able to occasionally catch.
Rule 5 : Master one style.
Keep learning and getting better at this one method of trading. Never jump from one trading style to another. Master one style rather than become average at implementing several styles.
Rule 6 : Let price and volume be my guides.
Never hear any viewpoint about the exchange or individual stocks you are considering trading or are trading. Everything is mirrored in the price and volume.
Rule 7 : Take all valid signals that show up.
Do not make excuses. If an entry signal shows up you have got no excuse to not take it.
Rule 8 : Never trade from intra-day information.
There is always stock price variation within the course of any trading day. Relying on this data for momentum trading can lead to some wrong decisions.
Rule 9 : Take time out.
Successful securities dealing isn't only about trading. It is also about emotional strength and physical fitness. Scale back the stress each day by taking time off the PC and working on other areas. A disturbing trader won't make it in the long run.
Rule 10: Be an above average trader.
In order to achieve success in the stockmarket you do not need to do anything phenomenal. You need to not do what the average trader does. The average trader is inconsistent and unruly. Ask each day, "Did I follow my technique today?" If your answer is no then you're in difficulty and it is time to recommit yourself to your stockmarket trading rules.
When you've a trustworthy set of securities dealing rules it's really important to keep them under consideration. Here is one discipline that will harvest rewards. Read these rules before your day starts and also read the guidelines when your day ends.
Rule 1 : I must follow my rules.
Naturally if you develop a group of rules they are going to be followed. It is human instinct to need to change or break rules and it takes discipline to act as agreed by the established rules.
Rule 2 : I can don't risk more than 3% of my total portfolio on any one stock trade.
There are many old traders. There are many bold traders. But there are never any old bold traders. Protecting your capital base is fundamental to successful stock market trading over time.
Rule 3: I will cut my losses at 5% to 15% when I am wrong without question.
Some traders have an even lower tolerance for loss. The key point here is to have set points (stop loss) within the limits of your tolerance for loss. Stay informed about the performance of you stock and stick to your stop loss point.
Rule 4 : Never set price targets.
This is a fashion that will let me get the best out of rising stocks. Simply let the profits run. Realistically, I'll never pick tops. Never feel a stock has risen too high too fast. Be ready to give back a good share of profits in the hope of much larger profits. The gigantic cash is made of trading the truly Large moves that I am able to occasionally catch.
Rule 5 : Master one style.
Keep learning and getting better at this one method of trading. Never jump from one trading style to another. Master one style rather than become average at implementing several styles.
Rule 6 : Let price and volume be my guides.
Never hear any viewpoint about the exchange or individual stocks you are considering trading or are trading. Everything is mirrored in the price and volume.
Rule 7 : Take all valid signals that show up.
Do not make excuses. If an entry signal shows up you have got no excuse to not take it.
Rule 8 : Never trade from intra-day information.
There is always stock price variation within the course of any trading day. Relying on this data for momentum trading can lead to some wrong decisions.
Rule 9 : Take time out.
Successful securities dealing isn't only about trading. It is also about emotional strength and physical fitness. Scale back the stress each day by taking time off the PC and working on other areas. A disturbing trader won't make it in the long run.
Rule 10: Be an above average trader.
In order to achieve success in the stockmarket you do not need to do anything phenomenal. You need to not do what the average trader does. The average trader is inconsistent and unruly. Ask each day, "Did I follow my technique today?" If your answer is no then you're in difficulty and it is time to recommit yourself to your stockmarket trading rules.
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