| Your stock trading rules are your money. When you | | | | The big money is made from trading the really BIG |
| follow your rules you make money. However if you | | | | moves that I can occasionally catch. |
| break your own stock trading rules the most likely | | | | Rule 5: Master one style. |
| outcome is that you will lose money. | | | | Keep learning and getting better at this one method |
| Once you have a reliable set of stock trading rules it | | | | of trading. Never jump from one trading style to |
| is important to keep them in mind. Here is one | | | | another. Master one style rather than become |
| discipline that can reap rewards. Read these rules | | | | average at implementing several styles. |
| before your day starts and also read the rules when | | | | Rule 6: Let price and volume be my guides. |
| your day ends. | | | | Never listen to any opinion about the stock market |
| Rule 1: I must follow my rules. | | | | or individual stocks you are considering trading or are |
| Naturally if you develop a set of rules they are to be | | | | already trading. Everything is reflected in the price |
| followed. It is human nature to want to vary or | | | | and volume. |
| break rules and it takes discipline to continue to act in | | | | Rule 7: Take all valid signals that show up. |
| accordance with the established rules. | | | | Don't make excuses. If an entry signal shows up you |
| Rule 2: I will never risk more than 3% of my total | | | | have no excuse not to take it. |
| portfolio on any one stock trade. | | | | Rule 8: Never trade from intra-day data. There is |
| There are many old traders. There are many bold | | | | always stock price variation within the course of any |
| traders. But there are never any old bold traders. | | | | trading day. Relying on this data for momentum |
| Protecting your capital base is fundamental to | | | | trading can lead to some wrong decisions. |
| successful stock market trading over time. | | | | Rule 9: Take time out. |
| Rule 3: I will cut my losses at 5% to 15% when I am | | | | Successful stock trading is not solely about trading. |
| wrong without question. | | | | It's also about emotional strength and physical fitness. |
| Some traders have an even lower tolerance for loss. | | | | Reduce the stress every day by taking time off the |
| The key point here is to have set points (stop loss) | | | | computer and working on other areas. A stressful |
| within the limits of your tolerance for loss. Stay | | | | trader will not make it in the long term. |
| informed about the performance of you stock and | | | | Rule 10: Be an above average trader. |
| stick to your stop loss point. | | | | In order to succeed in the stock market you don't |
| Rule 4: Never set price targets. | | | | need to do anything exceptional. You simply need to |
| This is a style that will allow me to get the most out | | | | not do what the average trader does. The average |
| of rising stocks. Simply let the profits run. Realistically, | | | | trader is inconsistent and undisciplined. Ask yourself |
| I can never pick tops. Never feel a stock has risen | | | | every day, "Did I follow my method today?" If your |
| too high too quickly. Be willing to give back a good | | | | answer is no then you are in trouble and it's time to |
| percentage of profits in the hope of much bigger | | | | recommit yourself to your stock trading rules. |
| profits. | | | | |