10 Trading Rules I Used To Stop Losing Money
Hello traders,
All the below are based on my preferences, I don't give any financial recommendations and I have nothing to sell you with this article.
I'm sharing content because I see a lot of traders being/becoming broke and I don't want you to be one of them.
I) Hard work versus efficient work
Work ethic doesn’t matter.
You can work as hard as possible and not get rich.
So getting rich is not about pure hard work.
Getting rich is about knowing what to do, when to do it, and with whom to do it.
It is about understanding.
Once you figure this out, the next is about executing the path —> which will probably require the hard work.
But as we see, the work comes implicitly in the execution of the path/destination.
So, don’t do the hard work for its own sake, that would be a waste of time.
II) The Understanding
You can develop this skill by becoming a perpetual learner.
And when feeling confused during the learning sessions ==> that’s OK.
Your brain is like a muscle, and it means that is being “trained”.
Foundation of “axioms” (based on full truth) are critical for learning and interpreting new information.
So, when developing the “axioms” make sure you are consuming high quality information.
III) How do we make sure that our foundation is high quality
Step 1: Stick to hard science, mathematics, the “basics”.
Why? There is no disagreement between people in these areas, so they are solid foundations.
With trading, simple always outperform complicated.
I’ve seen price action traders outperforming traders with multiple dozens of indicators on their chart.
In hindsight now the answer to why that is is obvious to me….
That’s because we tend to overcomplicate things and tend to believe that a more complex trading strategy leads to better results.
This couldn’t be further from the truth - this is untrue.
Sharing here a non-exhaustive “axioms” list I learned the hard way (not listed in a specific order)
1. Cut social medias completely when trading.
I literally block my own access to Twitter, Instagram, Facebook, Tim Tok… giving my access away to someone I trust and telling that person to change my password/email so that I can’t access them anymore.
2. I don’t necessarily need more winners than losers but I need my winners to be at least 2X in pips value my losers
3. More trades doesn’t mean more profit
4. Less trades doesn’t mean more profit either The profit isn’t correlated to the number of trades I’m taking per day but to me being reactive whenever a great opportunity presents itself
5. This one is very personal and based on who I am as a trader Leverage is OK in the 2X/3X range at most and only for rare opportunities with a huge risk to reward ratio.
6. I must NOT trade what I want to BUT trade what’s moving
7. It is OK to feel GREED/FOMO/FEAR, I can always adjust my position size to hedge my doubts.
8. It is NOT OK to make some good trades and keep trading for that trading session out of GREED/FOMO
9. It is NOT OK to not take a trade because the previous trades were losers That one required me years of self-mastery to accept it
10. I MUST ALWAYS expect the unexpected => leading me to banking profit automatically when the candles hit a Supports/Resistances zone AND withdrawing to my bank account on a weekly basis
Step 2: Read the classics and listen to trading podcasts where the top traders explain their strategies, mindset, psychology when approaching trades.
I really like the Youtube channel SMB traders and the podcast “Chat with traders”
PS: I have no affiliations with any of them.
From those 2 sources of information only, you’ll have a good spectrum of what could work and certainly what will never work with trading.
Once you acquire the solid foundations:
1. You won’t fear any book, and will have the confidence to learn anything you want.
And the more you learn, the more options you’ll have on how to make money from your trading.
Because you can understand whether a trading strategy could even be profitable without backtesting it.
2. You can then pick the thing where to achieve mastery. You will achieve “mastery” only on the few things you’re obsessed about.
For me, I’m a “master” at trading indices futures and CFDs.
I’ve been doing it for more than 10 years.
I can trade them even without indicators as I know how the DAX, DOW, SPX often react after a gap or a macro event or after a specific price action.
Quotes of the day
Leaving you now with a few quotes from some of the brightest minds
“Study game theory, psychology, mathematics and computers” - Naval Ravikant
“Opportunities come to the prepared mine” - Abraham Lincoln
“An investment in knowledge pays the best interest” - Benjamin Franklin
“Formal education will make you a living; self-education will make you a fortune” - Jim Rohn
I'll keep bringing a few articles like this every week because it helps me clarifying my thoughts AND giving back to the community makes me feel good about myself somehow :)
Thank you for reading
Dave
All the below are based on my preferences, I don't give any financial recommendations and I have nothing to sell you with this article.
I'm sharing content because I see a lot of traders being/becoming broke and I don't want you to be one of them.
I) Hard work versus efficient work
Work ethic doesn’t matter.
You can work as hard as possible and not get rich.
So getting rich is not about pure hard work.
Getting rich is about knowing what to do, when to do it, and with whom to do it.
It is about understanding.
Once you figure this out, the next is about executing the path —> which will probably require the hard work.
But as we see, the work comes implicitly in the execution of the path/destination.
So, don’t do the hard work for its own sake, that would be a waste of time.
II) The Understanding
You can develop this skill by becoming a perpetual learner.
And when feeling confused during the learning sessions ==> that’s OK.
Your brain is like a muscle, and it means that is being “trained”.
Foundation of “axioms” (based on full truth) are critical for learning and interpreting new information.
So, when developing the “axioms” make sure you are consuming high quality information.
III) How do we make sure that our foundation is high quality
Step 1: Stick to hard science, mathematics, the “basics”.
Why? There is no disagreement between people in these areas, so they are solid foundations.
With trading, simple always outperform complicated.
I’ve seen price action traders outperforming traders with multiple dozens of indicators on their chart.
In hindsight now the answer to why that is is obvious to me….
That’s because we tend to overcomplicate things and tend to believe that a more complex trading strategy leads to better results.
This couldn’t be further from the truth - this is untrue.
Sharing here a non-exhaustive “axioms” list I learned the hard way (not listed in a specific order)
1. Cut social medias completely when trading.
I literally block my own access to Twitter, Instagram, Facebook, Tim Tok… giving my access away to someone I trust and telling that person to change my password/email so that I can’t access them anymore.
2. I don’t necessarily need more winners than losers but I need my winners to be at least 2X in pips value my losers
3. More trades doesn’t mean more profit
4. Less trades doesn’t mean more profit either The profit isn’t correlated to the number of trades I’m taking per day but to me being reactive whenever a great opportunity presents itself
5. This one is very personal and based on who I am as a trader Leverage is OK in the 2X/3X range at most and only for rare opportunities with a huge risk to reward ratio.
6. I must NOT trade what I want to BUT trade what’s moving
7. It is OK to feel GREED/FOMO/FEAR, I can always adjust my position size to hedge my doubts.
8. It is NOT OK to make some good trades and keep trading for that trading session out of GREED/FOMO
9. It is NOT OK to not take a trade because the previous trades were losers That one required me years of self-mastery to accept it
10. I MUST ALWAYS expect the unexpected => leading me to banking profit automatically when the candles hit a Supports/Resistances zone AND withdrawing to my bank account on a weekly basis
Step 2: Read the classics and listen to trading podcasts where the top traders explain their strategies, mindset, psychology when approaching trades.
I really like the Youtube channel SMB traders and the podcast “Chat with traders”
PS: I have no affiliations with any of them.
From those 2 sources of information only, you’ll have a good spectrum of what could work and certainly what will never work with trading.
Once you acquire the solid foundations:
1. You won’t fear any book, and will have the confidence to learn anything you want.
And the more you learn, the more options you’ll have on how to make money from your trading.
Because you can understand whether a trading strategy could even be profitable without backtesting it.
2. You can then pick the thing where to achieve mastery. You will achieve “mastery” only on the few things you’re obsessed about.
For me, I’m a “master” at trading indices futures and CFDs.
I’ve been doing it for more than 10 years.
I can trade them even without indicators as I know how the DAX, DOW, SPX often react after a gap or a macro event or after a specific price action.
Quotes of the day
Leaving you now with a few quotes from some of the brightest minds
“Study game theory, psychology, mathematics and computers” - Naval Ravikant
“Opportunities come to the prepared mine” - Abraham Lincoln
“An investment in knowledge pays the best interest” - Benjamin Franklin
“Formal education will make you a living; self-education will make you a fortune” - Jim Rohn
I'll keep bringing a few articles like this every week because it helps me clarifying my thoughts AND giving back to the community makes me feel good about myself somehow :)
Thank you for reading
Dave
⭐️ Listed as TradingView Trusted Pine Programmer
📧 Coding/Consulting Inquiries: dave@best-trading-indicator
Telegram: Daveatt
⏩ Course: best-trading-indicator.com
Twitter: twitter.com/bti_trading
📧 Coding/Consulting Inquiries: dave@best-trading-indicator
Telegram: Daveatt
⏩ Course: best-trading-indicator.com
Twitter: twitter.com/bti_trading
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