Your securities dealing rules are your cash. When you follow your rules you earn money. However if you break your own securities dealing rules the most probable result is that you are going to lose money.
After you’ve a trustworthy set of stockmarket trading rules it’s critical to keep them under consideration. Here is one discipline that will harvest rewards. Read these rules before your day starts and also read the guidelines when your day ends.
Rule one : I must follow my rules.
Naturally if you develop a group of rules they are going to be followed. It is human instinct to need to change or break rules and it takes discipline to act as agreed by the established rules.
Rule two : I can don’t ever risk more than three percent of my total portfolio on any one stock trade.
There are many old traders. There are many bold traders. But there are never any old bold traders. Protecting your capital base is fundamental to successful stock market trading over time.
Rule 3: I will cut my losses at 5% to 15% when I am wrong without question.
Some traders have an even lower toleration for loss. The key reason here is to have set points ( stop loss ) in the boundaries of your toleration for loss. Stay informed about the performance of you stock and stick to your stop-loss point.
Rule four : Never set price targets.
This is a style that will allow me to get the most out of rising stocks. Simply let the profits run. Realistically, I can never pick tops. Never feel a stock has risen too high too quickly. Be willing to give back a good percentage of profits in the hope of much bigger profits.The big money is made from trading the really BIG moves that I can occasionally catch.
Rule 5: Master one style.
Keep on learning and improving at this one methodology of trading. Never jump from one trading style to another. Master one style instead of become average at implementing a few styles.
Rule 6: Let price and volume be my guides.
Never listen to any opinion about the stock market or individual stocks you are considering trading or are already trading. Everything is reflected in the price and volume.
Rule 7: Take all valid signals that show up.
Do not make excuses. If an entry signal shows up you have got no excuse to not take it.
Rule 8: Never trade from intra-day data.
There’s always share price difference in the course of any trading day. Relying on this info for momentum trading can cause some wrong calls.
Rule nine : Take time out.
Successful stockmarket trading isn’t only about trading. It is also about emotional strength and physical fitness. Scale back the stress each day by taking time off the computer and working on other areas. A difficult trader won’t make it in the long run.
Rule 10: Be an above average trader.
So as to succeed in the exchange you do not want to do anything exceptional. You need to not do what the average trader does. The average trader is inconsistent and unruly. Ask each day, “Did I follow my strategy today?” If your answer’s no then you’re in difficulty and it is time to recommit yourself to your stock trading rules.
Looking to find the best deal on daily stock tips, then visit my website to find the best advice on best online trading company for you.