My Golden Trading Rules
Patience and discipline
- Wait for the trade come to you. The idea is to make money consistently because you are patient and disciplined and don't over-trade. Protect your assets and trade only when the odds are in your favor. Trade when a situation is a high-percentage situation and back away from all other trades. WAIT FOR THE STOCK TO COME TO YOU !!
- There is no need to over-trade. Every trade costs commissions, and losses can add up dramatically. A few profitable quality trades brings profits need with low volatility for your account. This rule is used in both trading styles.
- Patience and discipline **Bears repeating**
- Capital Preservation (Limit losses), Always take a loss quickly and hopefully mitigate your losses, do not become emotionally attached to a stock.
- Do not trade if your head is not in the game!
My Day Trading Rules
- Order routing is the #1 Most important part of day-trading. Get to know your trading tools well with small lots of stock before you risk large amounts of your hard earned capital.
- Always, limit your losses, use stop orders.
- Learn from the losses - take advantage of each loss to improve your knowledge of the market.
- Never allow large profits to turn into losses.
- If the markets on a given day are not performing or reacting the way you expected, it is best to simply get out.
- Never add to a losing position. It is a prescription for disaster.
- Try to predict the general direction of a stock price, estimate (but do not be anal about) tops and bottoms. You will rarely succeed in accomplishing this, as a general rule.
- Remember that standing aside is a position and often the best one to take if you cannot form an opinion as to where the market is heading on a given day.
- The key difference between winning and losing day traders is the ability to exercise discipline to avoid mistakes or bad trading tactics.
- You must subordinate your will to the will of the market. The market is always right. Fundamentals, play a subordinate role when day trading.
- Always keep records of your trading results and analyze the results.
- Generally sell into good news and buy on bad news. There are exceptions
- Patience, perseverance, determination and an rational trading plan are the key attributes Never get emotionally involved with your trades as emotions often work against you.
- Do not try to profit on every trade. It is the total profit you make that matters not the number of individual wins. (Be quick to take a LOSS, do not let a small $100 loss turn into a $500-1000+ loss)
- Don't chase STOCKS and momentum if you are unsure as to the exit point. Assume the market will reverse itself as soon as you open a position. It usually does if you are not prepared.
- Decide each day how much risk you are willing to take and stick to your decision.
- Remember Rule#1 Access to timely information and fast execution of trades is essential to day trade successfully. Subscribe to a good financial information service and open an account with a Direct Access Trading firm or an online broker that caters to day traders. (Speed is very important, more so that cost of a trade)…. Refer to Table "Day Trading Profit Table)
- Do not try to focus on too many stocks at once. Limit your focus to a manageable number.
- Always think positive no matter how much you lose, Hard, to do but a MUST !!!Accept your losses gracefully, try to learn from them and move on. READ the Golden Rules when in doubt !