Trading rules – it sounds so boring (as any other rules). But they are so important for your survival in trading. I am not even talking about gaining profits…
And here we go, 4 trading rules to succeed:
#1 – You have to survive
As I previously mentioned, trading is like a war. And, Napoleon could give you many useful tips on how to trade better.
If you don’t survive, you can’t win. Black magic, inner voice, or feelings are not the 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 to survive.
Certainly, the focus is what guides people to success. There is always a reason how and why the market moves. So, I advise you to focus on one instrument and technic. You need to learn the market, its specifics, and trading technics in detail. If you don’t do that, you will never get a clear vision of 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 of 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 and investment decisions have to be motivated by logic, not by fear or greed. The mere fact you are a speculator means you have less fear than a ‘normal’ person does. Certainly, emotions are the trader’s Achilles’ heel. They will keep hopes alive, encourage you to hold on to losing trades, and nail down winners too soon.
The 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 a great trader, but if you don’t manage your money and risks, you will blow your account. You are a trader till you open a trade, once your trade is open you are a risk manager!
#4 Always use a trading plan
Overconfidence is another enemy of a trader. A 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 and don’t sleep all night long watching a screen and losing your nerves. Just stick to small lots and active money management – you will see results very soon. Believe me! 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.
The best 4 Trading Rules to Succeed by Inna Rosputnia