| Any person seeking to undertake day trading of | | | | cornerstone of many successful traders. |
| stocks must develop a steadfast habit of trading | | | | 5.) Losers Average Losers. You must never add to a |
| using a structured set of rules. Otherwise, you may | | | | losing position under any circumstances because |
| find yourself lost in a limitless maze of decisions that | | | | markets can remain illogical far longer than you or I |
| can be detrimental to your trading. Trading in general, | | | | can remain solvent. A losing trade is one which has |
| and day trading in particular, creates a free form | | | | triggered your Hard Stop. |
| environment which allows you to make almost any | | | | 6.) Trade For Extremely Consistent Gains. Develop a |
| type of decision whatsoever with respect to when | | | | mindset of banking steady and consistent profits |
| and where to buy or sell a stock. Many of the | | | | instead of a few home-run trades. |
| reasons that day traders wash-out can be traced | | | | 7.) You Must Take The Best Setups From Several |
| back to a few universal rules that many traders fail | | | | Different Stocks. You must only choose the best |
| to put into practice. Whether you are new to day | | | | trade setups from an analysis of many different |
| trading or a veteran looking for new ideas, the ten | | | | stocks in order to ensure that you are taking the |
| rules outlined below are worthy of strong | | | | best trades possible. |
| consideration for incorporating into your trading plan. | | | | 8.) Don't Bet The Farm On Any Particular Trade. |
| 1.) You Must Have A Winning Methodology. Without a | | | | Successful trading only exists in probabilities. This |
| reliable method for consistently extracting profits | | | | simply means that you can only "enjoy" the edge of |
| from day trading, implementing the remaining nine | | | | a particular strategy after an adequate number of |
| rules will be a futile endeavor. | | | | trades have been made. It may take a considerable |
| 2.) You Must Always Protect Your Capital. Your | | | | amount of trades before you are able to turn a |
| capital is everything. No Capital, No Trading. Plain and | | | | profit with a method that has a positive expectancy. |
| simple. You must always consider the amount of | | | | 9.) You Must Be Disciplined To Stick With Your |
| money you have a risk before you take a trade. If | | | | Method Through The Drawdowns. Yes, you will have |
| your risk is larger than you can tolerate, then, by all | | | | losing trades. However, after you have developed a |
| means, pass on the trade. | | | | winning methodology, you must be able to continue |
| 3.) You Must Always Employ A Hard Stop. Always | | | | taking trades even after a series of losers by |
| enter a Hard Stop on every trade because this sets | | | | remembering that a winning methodology will |
| a limit to the amount of money you can lose on a | | | | eventually drive your account equity back to new |
| trade. | | | | highs. |
| 4.) Never Turn A Winner Into A Loser. Never let a | | | | 10.) Your Day trading Plan Must Be Designed To Fit |
| winning trade turn into a loser by banking some | | | | Your Personality. Continually refine your methodology |
| profits when you get them. This can be accomplished | | | | to fit your personality and style until you are |
| by selling-out portions of your position at | | | | comfortably taking trades without reservation. |
| predetermined profit targets. In fact, this rule is the | | | | |