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Re: [RT] trading rules



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Trading is a business like any other.  You just buy and sell inventory.  In order to do this properly you need an education.  Like law, engineering, or any other profession an education is a requirement.  People who enter their own businesses fail over 95% of the time.  That holds true for trading also.  So, if I were you, I would pull my chips off of the table and start to analyze what you have been doing.  Most successful traders analyze all of their trades at the end of the day,  both the winners and the losers.  They want to know why they were successful and why they failed.  There are a lot of good books out there on technical analysis and fundamental analysis.  See what fits the type of trader you want to be.  Remember that you are entering a business that is based upon the greater fool theory.  You buy because you feel that someone will pay more for it then you did, or you sell short because you feel that you will be able to buy it back for less than you sold it at.  In up markets there are stocks that go down and in down markets there are stocks that go up.  This is not a world shattering conclusion, just fact.  There are literally dozens of reasons for a stocks price to rise or fall and the same goes for futures.  You should sit down and write what you want your system to do for you.  The answer is not make money, it is a set of things that the system should do.  Here is what I wrote down when I developed the system that I have used for over 30 years.
 
1.    I want specific entry and exit points
2.    I want a stop that tells me I am wrong and not one based upon financial pain.
3.    I want no more than 3 indicators to confirm or reject my entry price. (I ended up with 2)
4.    I want a money management system that will keep my risk within specific parameters.
 
It took me a year to put it all together.  All the of information is out there.  Most of it had been around for years and years.  I didn't come up with anything new and I didn't re-invent the wheel.  I didn't back test the system because I didn't want to fit the system to past data.  I worked with it everyday until I found all of the parts that fit and the way to use the parts that suited my trading personality.  I have used the system for over 35 years and I have never had to change it or modify it no matter what the market conditions.
 
You are the only one that can change your trading success rate and education and self analysis are the things that you have to do before you can become successful at this business or any other business.
 
Just one man's opinion.
----- Original Message -----
From: sue crew
Sent: Wednesday, September 17, 2008 12:23 AM
Subject: Re: [RT] trading rules

What happens when you consistently take losses - how can you turn it around?
 
Is it a case of just being a bad trader?
 
 
----- Original Message -----
From: grehert
Sent: Saturday, September 13, 2008 7:39 PM
Subject: Re: [RT] trading rules

Is there any "good" day-trading training you'd recommend?
 
JerryR
----- Original Message -----
From: Ben
Sent: Friday, September 12, 2008 11:33 PM
Subject: [RT] trading rules

very helpful
20 DOS & DON'TS OF DAY-TRADING
 
DOS:
 
1) Be patient--don't just dive into a trade
2) Develop a proven strategy--don't just trade blindly
3) Trade what you know and understand--if you cannot explain it, why trade it?
4) Check the daily news on your stock before you trade--stay informed on upgrades/downgrades/earnings etc...
5) Do a quick risk/reward analysis before you place the trade--put yourself in a good position to make money
6) Watch a stock's trading behavior for a while--learn its "personality"
7) Cut your losses short and let your winners run--basic, but effective
8) Get into a pairs trade if your initial trade is not working--reduce your risk
9) Trade with the markets that day--shift your deltas according to market conditions
10) Anticipatre the unanticipated--always have some offsetting position just in case events reverse
11) Live to fight another day--no cash means no trading
12) If you have a hot hand then work it, if you don't then consider folding--recognize your rhythm
13) Know yourself--trade within your comfort zone
14) Stay focused--rid yourself of distractions
15) Trade with simplicity--don't overthink things
16) Stay positive--negative energy can impact your trading behavior and results
17) Learn from your mistakes--mistakes are inevitable so use them to your advantage
18) Drop your ego at the door--it's ok to take a loss, it's part of the game
19) Take a deep breath--it's going to be ok
20) Read as much material as you can on day-trading strategies--knowledge is power
 
DON'TS
 
1) Don't get emotional--the market is benign to your feelings
2) Don't over-leverage into bad trades--reduce your risk, not increase your risk
3) Don't get in all at once in a trade--build your position piece by piece
4) Don't get greedy--fade the trade and book profits systematically
5) Don't trade purely on technicals--fundamentals matter!!
6) Don't stuff your plate--trade a manageable number of stocks at one time
7) Don't trade solely on candlesticks---make sure you have a technical study set applied
8) Don't catch "falling knives" or short "rocketships"--wait until the trend is exhausted
9) Don't force yourself to trade--trade when the opportunity is right, not because you have to
10) Don't trade like a compulsive gambler--trade under control
11) Don't get caught up in the media noise/market hype--"those who know don't tell; those who tell don't know"
12) Don't trade on stock tips--be circumspect of other motives
13) Don't gloat over or brag about your last trade--focus on your next trade
14) Don't feel as if you have to get all your money back at one time if you sustain losses--take it one day at a time
15) Don't get discouraged--even the professionals get burned
16) Don't give up a gain when you have it--it's ok to make a bad trade, but inexcusable to give up a gain
17) Don't get cocky--the market is bigger than all of us and can reverse your fortune at any time
18) Don't think this is a way to generate "easy" income--if it were so easy, noone would ever work another job
19) Don't take your trading home with you--divorce yourself from the market because it's not your whole life
20) Don't put all your eggs into one basket--stay diversified with your financial wherewithal

 

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