The trading rules I follow
Trading Rules:
- Buy low, sell high. Selling at a low, and buying at a high is a good way to lose money.
- Avoid making rash decisions, yet at the same time be prepared to buy high, or sell low if the price is beginning to trend in that given direction and has potential. Wait for a low risk area so that you can enter.
- Determine what is the very low and the very high if possible. There are tell-tale patterns that appear at the tops and the bottoms before a large correction or trend change.
- Wait for an ideal trade; a low risk, sure fire trade.
- Have patience. Don't take high risk trades.
- Have an exit strategy. Stop-losses behind key levels, etc. .
- Trade only if your target is at least twice of what you are risking.
- Follow through with your trade.
- Don't get scared out of a position prematurely, there's many shakeouts during a trend.
- Avoid going against the trend unless an ideal trade appears.
- Only add more to a position if the price is going in your favor.
- Trade only a relatively small percentage of your balance, with some exception for ideal trades. For larger scale trades, trade less.
- Learn to differentiate between a correction in an up trend and a longer lasting down trend. Vice versa.
- Watch for higher highs paired with higher lows, or lower highs paired with lower lows, as this is indicative of the trend.
- Watch for Divergences on the 30 minute scale, preferably with the Fisher Transform indicator.
- After large periods of low volume, the trend might switch. Watch the highs and the lows for some idea of which direction it'll go.
- If you catch wind of a significantly negative news event before anything much has happened yet; sell.
- Watch for repeating patterns and take advantage of them, but understand they might eventually fail when the market is exhausted or has a different bias.
- In an up trend, it's difficult to beat buy-and-hold. The opposite is true in a down trend market with a short. So be wary of exiting your position for a relatively small profit opportunity, but know when to exit.
- Avoid trading when the market is sideways. Unless you're skilled at trading ranges, avoid it! Watch the highs and lows for some idea of where it will go.
- Sideways markets at the high of the market are more likely to break upward in the end. Yet because of how nerve wracking it can be, it's easy to second guess yourself here, don't!
- Try to understand the market, and how it behaves, and why it behaves the way it does.
- Avoid trading when intoxicated, exhausted, sickly, or if you have made many bad trades in a row. Take a break, take care of your health.
- Don't trade everything, if it's too uncertain or too risky, don't trade it yet.
- If the market isn't going where people expect it to, they'll often try to rationalize their position any way they can. When all you have is hope, wishful thinking and stubbornness; you shouldn't be trading.
- Take note of the common mistakes you make, and work out how to avoid these mistakes. Perhaps have a chart that shows all of your trades to analyze.
- Remember that probability is very important. Some events are more likely than others, and those events should be taken advantage of. Weigh risk with probability.
- Understand that some information is more useful than other information, and that most information is useless. Indicators are mostly useless.
- Know that people will always be thinking the market is just about to make a big turn around. Most of the time they're wrong, but sooner or later they'll be right.
- Most shouldn't be trusted or relied upon, trust and rely upon yourself. Disregard those who are vocal, emotional, or agree with what you feel at the time.
- Know that most people who trade do not profit in the long run. Markets have a habit of deceiving people at every turn.
- Watch for market exhaustion. Sometimes the market just can't push anymore, but it might keep trying for a while.
- Buy low, sell high. Selling at a low, and buying at a high is a good way to lose money.
- Avoid making rash decisions, yet at the same time be prepared to buy high, or sell low if the price is beginning to trend in that given direction and has potential. Wait for a low risk area so that you can enter.
- Determine what is the very low and the very high if possible. There are tell-tale patterns that appear at the tops and the bottoms before a large correction or trend change.
- Wait for an ideal trade; a low risk, sure fire trade.
- Have patience. Don't take high risk trades.
- Have an exit strategy. Stop-losses behind key levels, etc. .
- Trade only if your target is at least twice of what you are risking.
- Follow through with your trade.
- Don't get scared out of a position prematurely, there's many shakeouts during a trend.
- Avoid going against the trend unless an ideal trade appears.
- Only add more to a position if the price is going in your favor.
- Trade only a relatively small percentage of your balance, with some exception for ideal trades. For larger scale trades, trade less.
- Learn to differentiate between a correction in an up trend and a longer lasting down trend. Vice versa.
- Watch for higher highs paired with higher lows, or lower highs paired with lower lows, as this is indicative of the trend.
- Watch for Divergences on the 30 minute scale, preferably with the Fisher Transform indicator.
- After large periods of low volume, the trend might switch. Watch the highs and the lows for some idea of which direction it'll go.
- If you catch wind of a significantly negative news event before anything much has happened yet; sell.
- Watch for repeating patterns and take advantage of them, but understand they might eventually fail when the market is exhausted or has a different bias.
- In an up trend, it's difficult to beat buy-and-hold. The opposite is true in a down trend market with a short. So be wary of exiting your position for a relatively small profit opportunity, but know when to exit.
- Avoid trading when the market is sideways. Unless you're skilled at trading ranges, avoid it! Watch the highs and lows for some idea of where it will go.
- Sideways markets at the high of the market are more likely to break upward in the end. Yet because of how nerve wracking it can be, it's easy to second guess yourself here, don't!
- Try to understand the market, and how it behaves, and why it behaves the way it does.
- Avoid trading when intoxicated, exhausted, sickly, or if you have made many bad trades in a row. Take a break, take care of your health.
- Don't trade everything, if it's too uncertain or too risky, don't trade it yet.
- If the market isn't going where people expect it to, they'll often try to rationalize their position any way they can. When all you have is hope, wishful thinking and stubbornness; you shouldn't be trading.
- Take note of the common mistakes you make, and work out how to avoid these mistakes. Perhaps have a chart that shows all of your trades to analyze.
- Remember that probability is very important. Some events are more likely than others, and those events should be taken advantage of. Weigh risk with probability.
- Understand that some information is more useful than other information, and that most information is useless. Indicators are mostly useless.
- Know that people will always be thinking the market is just about to make a big turn around. Most of the time they're wrong, but sooner or later they'll be right.
- Most shouldn't be trusted or relied upon, trust and rely upon yourself. Disregard those who are vocal, emotional, or agree with what you feel at the time.
- Know that most people who trade do not profit in the long run. Markets have a habit of deceiving people at every turn.
- Watch for market exhaustion. Sometimes the market just can't push anymore, but it might keep trying for a while.
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