Trading rules every trader should follow to succeed in trading
Trading rules – it sounds so boring (as any other rules). But it’s so important for your survival in trading, I am not even talking about gaining profits…
And here we go – trading rules:
#1 – You have to survive. As I previously mentioned trading is like a war and Napoleon could give you may useful tips how to trade better. If you don’t survive, you can’t win. Black magic, inner voice or feelings are not basis for military (or in our case trading) strategy. A premise suggests there is an underlying truth to what you are taking action upon. Only proven logic and tools can help you survive.
#2 Focus. Trading rules, business rules or any other, but focus is what guide people to success. There is always reason how and why maket moves. There is a lot of that don’t work, than there are techniques that do. I suggest you to focus in one market at beginning and on one technic. You need to learn market, it’s specifics and trading technics in details. If you don’t do that, you will never get clear vision why you don’t get profits.
Focus, to me, means not only focusing on the task at hand but also narrowing your scope of trading to either one or two markets or to the specific approach of a trading technique. Have you ever tried juggling? It’s pretty hard to learn to keep three balls in the area at one time. Most people can learn to watch those ‘details’ after about 3 hours or practice. Add one ball, one more detail to the mess, and few, very few, people can make it as a juggler. It’s precisely that difficult to keep your eyes on just one more ‘chunk’ of data. The better your focus, in whatever you do, the greater your success will become. Lack of attention may mean you don’t take the trade you should, or neglect a trade that leads to great cost.
#3 Control your emotions. Your money management decisions and investment decisions have to be motivated by logic, not by fear and greed. The mere fact you are a speculator means you have less fear than a ‘normal’ person does. Emotions is the trader’s Achilles’ heel. They will keep hopes alive, encourage you to hold on to losing trades and nail down winners too soon.
Trading world is too real, dreamers or those, why rely on hope all the time, will not survive. Money management and risk management is the creation of wealth. You can be great trader, but if you don’t manage your money and risks, you will blow your account. You are traders till you open a trade, once your trade is open you are risk manager!
#4 Always use a trading plan. Overconfidence is anothe enemy of trader. Good trader always has some doubts and Plan B. Just ask yourself: “What if…”. Eventually if you bet big you will lose – and you will lose big. No sense to open huge lots, don’t sleep all nights long watching screen and loose your nerves. Just stick to small lots and active money management – you will results very soon. Believe me! That is what I repeat every day for my trading signals subscribers. Big money does not make big bets. Trading is not a casino, you have to plan your trades, as you would do an investment plan for any other business.