Monday, January 21, 2013

List of 17 General Trading Rules & Investing Lessons

  1. Establish your risk and stop loss before you hit the buy key.
  2. If it's worth trading, it's worth writing it down. Keep a journal.
  3. Embrace the "Law of Probabilities" and execute your system with consistency.
  4. Embrace technology and take it with you to track positions when you travel.
  5. Investing is a competition.  Bring your "A" game mindset to the table every day.
  6. Yesterday's state of mind doesn't matter.  The only thing that matters is today, here and now.
  7. Listen to the market.  Focus on what the market is telling you, and don't concern yourself with trying to figure out why it's happening.
  8. Every trade should yield a key takeaway lesson.
  9. Stay true to your methodology and your system, not your emotions.
  10. Be brutally honest about your personal "enemies within" and deal with them. Know yourself.
  11. Procrastination and denial have no place in a trader's tool kit.
  12. Do not trade when you are discombobulated or out of equilibrium.
  13. Don't focus on the dollars.  Focus instead on the execution of your trading methodology.
  14. Devise both a bullish and a bearish scenario for your equity when the market is closed.
  15. Never give back more than 50% of your profits on an equity.
  16. Selling is a solo inner struggle.  Don't look for company.
  17. Never lose sight of your money management routines.