Of course, there are rules that will help you sharpen things up and rules that will help eliminate some bad entries as well. But, we are doing the simplified look for now
Avoid big losses at all costs. The higher your % loss, the higher the % gain you need to get your money back. A 50% loss you needs a 100% gain to break even
Control Risk
Know your exit criteria before you enter a trade.
Exit as soon as the reason for your entry is not valid anymore
Liquid Assets
Liquid assets are easier to exit. As a matter of fact technical analysis is more reliable w/ highly liquid assets. Large volume makes it much more difficult to manipulate an asset
Buy Strong Assets Short Weak Assets
A strong asset has less overhead resistance & better "flow"
Just The Charts
Trading for a living requires different skills. Everything you need to know is right there in front of you. If you can’t see it, it probably isn’t there.
1. Self-Reliance. A man must think for himself, must follow his own convictions
“A man cannot have another
man’s ideas any more than he can another man’s soul or another man’s body”
Self-trust is the foundation of successful effort
2. Judgment. The ability to adjust ones faculties, which is called good judgment, is an essential to the speculator
3. Courage. That is, confidence to act on the decisions of the mind. In speculation there is value in Mirabeau’s dictum: “Be bold, still be bold; always be bold”
4. Prudence. The power of measuring the danger, together with a certain alertness and watchfulness, is very important.
There should be a balance of these two, Prudence and Courage;
If we are to become a great trader we will go through some variation of all 6 of these stages. Being aware of these stages can help you identify where you are now and where you need to eventually be.