MY TOP 10 RULES IN TRADING

MY TOP 10 RULES IN TRADING.

Rule 1: Always Use a Trading Plan

Make sure you set entry, exit, and money management criteria for every trade.

The key here is to stick to the plan. Taking trades outside of the trading plan, even if they turn out to be winners, is considered a poor strategy.

Rule 2: 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. If it's a job, it can be frustrating because there is no regular paycheck.

Trading is a business and incurs expenses, losses, taxes, uncertainty, stress, and risk. As a trader, you are essentially a small business owner and you must research and strategize to maximize your business's potential.

Rule 3: Use Technology to Your Advantage

Trading is a competitive business. It's safe to assume that the person sitting on the other side of a trade is taking full advantage of all of the available technology.

Charting platforms give traders an infinite variety of ways to view and analyze the markets.

Don't trade futures using your phone! (unless you're an expert)

Rule 4: Protect Your Trading Capital

Saving enough money to fund a trading account takes a great deal of time and effort. It can be even more difficult if you have to do it twice.

It is important to note that protecting your trading capital is not synonymous with never experiencing a losing trade. All traders have losing trades. Protecting capital entails not taking unnecessary risks and doing everything you can to preserve your trading business.

Rule 5: Become a Student of the Markets

Think of it as continuing education. Traders need to remain focused on learning more each day. It is important to remember that understanding the markets, and all of their intricacies, is an ongoing, lifelong process.