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- Ignoring their own trading rules is one of the most destructive habits a trader can have. It is vital that a trader view the success or failure of each individual trade according to whether they followed their trading rules—not whether the trade resulted in a profit or loss.
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19 hours ago · 2. Follow Simple Strategies. Professional traders tend to avoid complex strategies as it can create chaotic situations with a lot of confusion. Simple strategies are followed regularly that can be easily transformed as per the requirement. Professional traders make their rules and stick to them as these rules guide them towards the moves in the ...
- The Road to Long-Term Profitability
- Stick to Your Discipline
- Lose The Crowd
- Engage Your Trading Plan
- Don’T Cut Corners
- Avoid The Obvious
- Don’T Break Your Rules
- Avoid Market Gurus
- Use Your Intuition
- Don’T Fall in Love
Long-term profitability requires two related skill sets. The first is to identify a set of strategies that make more money than they lose and then to use the strategies as part of a trading plan. Second, the strategies must perform well while the market experiences both bull and bear impulses. In other words, while many traders know how to make mon...
Discipline can’t be taught in a seminar or found in expensive trading software. Traders spend thousands of dollars trying to compensate for their lack of self-controlbut few realize that a long look in the mirror accomplishes the same task at a much lower price. The important lesson is that, once a trader has confidence in their trading plan, they ...
Long-term profitability requires positioning ahead of or behind the crowd, but never in the crowd because that’s where predatory strategies target. Stay away from stock boards and chat rooms, where people are less than serious and many of them have ulterior motives.
Update your trading planweekly or monthly to include new ideas and eliminate bad ones. Go back and read the plan whenever you fall in a hole and are looking for a way to get out.
Your competition spends hundreds of hours perfecting strategies and you’re in for a rude awakening if you expect to throw a few darts and walk away with a profit. The only way to achieve long-term success is with hard work and discipline.
Profits rarely come from following the majority or the crowd. When you see a perfect trade setup, it’s likely that everyone else sees it as well, planting you in the crowd, and setting you up for failure.
You create trading rules to get you out of trouble when positions go badly. If you don’t allow them to do their job, you’ve lost your discipline and opened the door to even greater losses.
It’s your money at stake, not theirs. Keep in mind that the guru might be talking up their own positions, hoping the excited chatter will increase their profits, not yours.
Trading uses the mathematical and artistic sides of your brain so you need to cultivate both to succeed in the long run. Once you're comfortable with math, you might want to try to enhance results with meditation, a few yoga postures, or a quiet walk in the park.
If you're too in love with your trading vehicle or investment, you give way to flawed decision-making. It’s your job to capitalizeon inefficiency, making money while everyone else is leaning the wrong way.
- Alan Farley
- Jean Folger
- 2 min
- Always Use a Trading Plan. A trading plan is a set of rules that specifies a trader's entry, exit, and money management criteria for every purchase.
- Treat Trading Like a Business. To be successful, you must approach trading as a full or part-time business, not as a hobby or a job. If it's approached as a hobby, there is no real commitment to learning.
- Use Technology to Your Advantage. Trading is a competitive business. It's safe to assume that the person on the other side of a trade is taking full advantage of all the available technology.
- Protect Your Trading Capital. Saving enough money to fund a trading account takes time and effort. It can be even more difficult if you have to do it twice.
Jul 24, 2022 · It is vital that a trader view the success or failure of each individual trade according to whether they followed their trading rules—not whether the trade...
- Always be disciplined. Follow your plan and rules. Do not be swayed by your emotions to act otherwise. Do not create excuses to break the rules – this time is NOT different!
- Plan the trade, trade the plan. Always cut your losses according to plan. Always let your profits run according to plan. Separate your planning from your execution.
- Expect losses. Losses are part of trading – accept them. This will reduce emotional resistance when the time comes to do so. Do not take a trade unless you are willing to accept the risk (possibility of loss) that accompanies the trade.
- Manage your emotions. When in doubt or unsure, get out! Always analyze objectively. Clear all positions to have a neutral frame of mind. Do not act based on greed or fear.
Feb 19, 2024 · The Importance of Trading Rules. Trading rules act as a guide to help you navigate the complex world of financial markets. They provide a framework for making decisions and help you stick to a plan, even when emotions might be running high.
May 2, 2024 · Trading Rules for Beginners. If you don’t have trading rules set up right from the start before entering a trade, you won’t be successful. Everyone wants to make money in the stock market, but managing risk is also important. Keep your losses small, let your winners run, and take your profits.
