GOLDEN RULES TO FOLLOW IN TRADING đź‘Ť
1. Gameplan: What’s yours? This doesn’t need to be anything fancy, but a framework to stick to and allow you to evaluate what you’ve been doing, right or wrong.
2. Don’t risk too much: You’re unlikely to call every trade right. The aim’s to stay in the game, so be sure to keep enough back to allow trading through the tough times. Scale up when profitable, and down when not.
3. Trade with conviction: Don’t trade for the sake of it. If worthwhile opportunities (on which to risk your money) can’t be identified, you may be best looking elsewhere or even sitting on your hands.
4. Take responsibility: Be sure of what you’re doing. You only get one chance to lose all your capital.
5. Run profits, not losses: If a profitable trade wants to become more profitable, let it be. If a trade is going wrong, why watch it get worse. Recovering losses is even harder work.
6. Stay disciplined: Don’t let your heart rule your head. You are risking money. Your money. The best traders keep their emotions in check.
7. Use protection: Losing trades need to be kept under control, while profits should also be protected. Use stop losses wherever you can, allowing for adequate breathing space.
8. Learn from your mistakes: Keeping record of both wins and losses can help avoid trip ups int he future.
9. Keep your feet on ground: Everybody has good streaks. Don’t let them go to your head.
10. Back to basics: Learning new things is great, but don’t get carried away. Remember the simple things.
11. Markets go down as well as up: Don’t rule out shorting. You can also profit from falling markets.
12. Respect the trend: Calling the bottom or top of the market is akin to catching a falling knife. It can be done but you often get hurt. Going with the flow can be a lot easier. Be aware of the trend.
13. Risk/Reward: Is what you’re risking worth the potential reward? Is it prudent to put £500 on the block for the sake of gaining another £500? Some talk of a looking for rewards 3 times greater than what’s risked.
14. Take stock: Review your positions regularly. Is your reason for placing/being in a trade still valid?
15. Enjoy yourself!