The Stock Market: Following Your Trading Rules

The Stock Market: Following Your Trading Rules

Understanding how the stock market works is one thing, but having a system in place that will let you have full control of the factors that can affect your trading decisions is a whole new thing. Every trader should have a particular set of rules to follow while trading, and beginners like you should also organize one.

Your trading rules can be as rigid or as flexible as you wish, as long as you reach your goals by sticking to them. In general, your trading rules should let you minimize your losses and inspire your gains. Your rules should overpower your emotions, and they should help you bet on the right stock.

Once you have decided on your trading rules, there is no turning back. So as you frame your trading rules, consider essential stock market aspects such as how much money you are willing to invest on a particular stock, how long you are going to invest in one stock, and so on.

Here are some quick universal Forex trading rules we have gathered :

  • Define your long-term goals
  • Treat trading as a business
  • End every day in profit
  • Every trade must conform to objective criteria
  • Never force a trade
  • There’s nothing wrong with getting out early if you are in profit
  • Always have a profit target for the day
  • Always stick to a small daily profit target
  • Your initial trading stake should be small
  • Do not enter a trade without a profit target
  • Always set a hard stop
  • Do not trade unless you are nearly 100% certain about what will happen
  • Do not trade when signals are mixed
  • Follow your system
  • Don’t lose your head
  • Identify key support and resistance levels
  • Look at longer timeframes for both support and resistance, and for clues regarding
  • future price direction
  • Be aware of peak market times
  • Be careful when trading in the Asian session
  • Don’t trade thin or directionless markets
  • Be careful when trading forex on non-news days
  • If you trade intraday, don’t enter a trade unless you can actively focus on it
  • Avoid reversing trades
  • Stay out of the market near news release time
  • Watch your broker like a hawk
  • Don’t go crazy with leverage
  • Stop trading after two consecutive losses
  • Take profits quicker after a losing streak
  • Don’t gloat over your winners
  • Be wary of chat rooms and online forums
  • Don’t buy systems
  • Stay healthy -no point on making money if you die young
  • Don’t give up

Further reading on The Stock Market:
http://money.howstuffworks.com/personal-finance/financial-planning/stocks.htm
http://www.saistocks.in/important-rules-for-intraday-traders.html

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