Top 10 Rules for Successful Trading

By Share Info Bazaar | April 09, 2024

Rule 1: Always Use a Trading Plan

A trading plan is a set of rules that specifies a trader's entry, exit, and money management criteria for every purchase.

To be successful, you must approach trading as a full or part-time business, not as a hobby or a job.

Rule 2: Treat Trading Like a Busine

Trading is a competitive business. It's safe to assume that the person on the other side of a trade is taking full advantage of all the available technology.

Rule 3: Use Technology to Your Advantage

It is important to note that protecting your trading capital is not synonymous with never experiencing a losing trade. 

Rule 4: Protect Your Trading Capital

Rule 5: Become a Student of the Market

Hard research allows traders to understand the facts, like what the different economic reports mean. Focus and observation allow traders to sharpen their instincts and learn the nuances.

Money in a trading account should not be allocated for college tuition or the mortgage. 

Rule 6: Risk Only What You Can Afford to Lose

It may be tempting to believe in the "so easy it's like printing money" trading scams that are prevalent on the internet.

Rule 7: Develop a Methodology Based on Fact

Rule 8: Always Use a Stop Loss

A stop loss is a predetermined amount of risk that a trader is willing to accept with each trade.  

An ineffective trading plan shows greater losses than anticipated in historical testing. 

Rule 9: Know When to Stop Trading

Stay focused on the big picture when trading. A losing trade should not surprise us; It's a part of trading. 

Rule 10: Keep Trading in Perspective

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