Your stock trading rules are your money. When you follow your rules you make money. However if you break your own stock trading rules the most likely outcome is that you will lose money.
Once you have a reliable set of stock trading rules it is important to keep them in mind. Here is one discipline that can reap rewards. Read these rules before your day starts and also read the rules when your day ends.
Rule one : I must follow my rules.
Naturally if you develop a set of rules they are going to be followed. It is man's instinct to need to alter or break rules and it takes discipline to act as per the established rules.
Rule two : I can don't ever risk more than three percent of my total portfolio on any one stock trade.
There are several old traders. There are lots of bold traders. But there are never any old bold traders. Defending your capital base is basic to successful stock exchange trading over a period of time.
Rule 3: I will cut my losses at 5% to 15% when I am wrong without question.
Some traders have an even lower toleration for loss. The key point here is to have set points ( stop loss ) in the boundaries of your toleration for loss. Stay informed about the performance of you stock and stick to your stop-loss point.
Rule four : 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 five : Master one style.
Keep on learning and improving at this one system of trading. Never jump from one trading style to another. Master one style instead of become average at implementing a few styles.
Rule six : Let price and volume be my guides.
Never hear any opinion of the stockmarket 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 data.
There's always share price difference in the course of any trading day. Relying on this info for momentum trading can cause some wrong calls.
Rule nine : Take time out.
Successful stock trading isn't solely about trading. It's also about emotional strength and physical fitness. Reduce the stress every day by taking time off the computer and working on other areas. A stressful trader will not make it in the long term.
Rule ten : Be a better than average trader.
In order to succeed in the stock market you don't need to do anything exceptional. You simply need to not do what the average trader does. The average trader is inconsistent and undisciplined. Ask yourself every day, "Did I follow my method today?" If your answer is no then you are in trouble and it's time to recommit yourself to your stock trading rules.
Once you have a reliable set of stock trading rules it is important to keep them in mind. Here is one discipline that can reap rewards. Read these rules before your day starts and also read the rules when your day ends.
Rule one : I must follow my rules.
Naturally if you develop a set of rules they are going to be followed. It is man's instinct to need to alter or break rules and it takes discipline to act as per the established rules.
Rule two : I can don't ever risk more than three percent of my total portfolio on any one stock trade.
There are several old traders. There are lots of bold traders. But there are never any old bold traders. Defending your capital base is basic to successful stock exchange trading over a period of time.
Rule 3: I will cut my losses at 5% to 15% when I am wrong without question.
Some traders have an even lower toleration for loss. The key point here is to have set points ( stop loss ) in the boundaries of your toleration for loss. Stay informed about the performance of you stock and stick to your stop-loss point.
Rule four : 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 five : Master one style.
Keep on learning and improving at this one system of trading. Never jump from one trading style to another. Master one style instead of become average at implementing a few styles.
Rule six : Let price and volume be my guides.
Never hear any opinion of the stockmarket 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 data.
There's always share price difference in the course of any trading day. Relying on this info for momentum trading can cause some wrong calls.
Rule nine : Take time out.
Successful stock trading isn't solely about trading. It's also about emotional strength and physical fitness. Reduce the stress every day by taking time off the computer and working on other areas. A stressful trader will not make it in the long term.
Rule ten : Be a better than average trader.
In order to succeed in the stock market you don't need to do anything exceptional. You simply need to not do what the average trader does. The average trader is inconsistent and undisciplined. Ask yourself every day, "Did I follow my method today?" If your answer is no then you are in trouble and it's time to recommit yourself to your stock trading rules.
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