Trading rules are vital to ensuring a trader stays on the right path toward success.
Here’s everything you need to know to become a consistent trader.
Here’s everything you need to know to become a consistent trader.
1) Treat trading like a business
- Set realistic goals & expectations
- Respect your cash and account size
- Pay yourself at the end of each week
- The more time you invest in understanding yourself and the market, the higher chance of achieving consistency in trading
- Set realistic goals & expectations
- Respect your cash and account size
- Pay yourself at the end of each week
- The more time you invest in understanding yourself and the market, the higher chance of achieving consistency in trading
2) Never average down on a losing position
- If a trade is going to work, there’s no need to buy more
- Averaging down may work 50% of the time, but one day you may avg down too much and blow your account
- Focus on high-quality trades and following your rules
- If a trade is going to work, there’s no need to buy more
- Averaging down may work 50% of the time, but one day you may avg down too much and blow your account
- Focus on high-quality trades and following your rules
3) Never have a bias
- Having a bias will hinder your ability to see trades objectively
- Follow price action & never trade counter-trend
- Don’t try to be “right” all the time
- I’d rather be wrong and make 100k by following price action than try to be right and miss a trade
- Having a bias will hinder your ability to see trades objectively
- Follow price action & never trade counter-trend
- Don’t try to be “right” all the time
- I’d rather be wrong and make 100k by following price action than try to be right and miss a trade
4) Always take profit on the way up
- You don’t need to hit home runs/grand slams to grow your account
- Systematically take profits (30, 50, 75, 100%+) on the way up
- Each partial sell can help remove emotion while reducing risk, which can help you trade objectively
- You don’t need to hit home runs/grand slams to grow your account
- Systematically take profits (30, 50, 75, 100%+) on the way up
- Each partial sell can help remove emotion while reducing risk, which can help you trade objectively
5) Protect your capital/manage risk
- One, two, or three trades should never have the ability to wipe out your account
- Never risk more than 20% of capital in weekly options
- Learn to trade smaller size and you will see how much easier it will be to manage your positions
- One, two, or three trades should never have the ability to wipe out your account
- Never risk more than 20% of capital in weekly options
- Learn to trade smaller size and you will see how much easier it will be to manage your positions
6) Always stay grounded
- It doesn’t matter if you make $100 or $100,000 in a day, you need to learn how to appreciate your profits regardless of the amount
- Never compare yourself to other traders, you don’t know what they’ve gone through to get to the level they’re at
- It doesn’t matter if you make $100 or $100,000 in a day, you need to learn how to appreciate your profits regardless of the amount
- Never compare yourself to other traders, you don’t know what they’ve gone through to get to the level they’re at
7) Cash is a position
- Mental & physical capital preservation is key to long term success and consistency
- If you do not see any trades you would take 90% of the time or feel FOMO, stay cash
- If the market is stuck in a range, it’s best to sit/observe & protect your capital
- Mental & physical capital preservation is key to long term success and consistency
- If you do not see any trades you would take 90% of the time or feel FOMO, stay cash
- If the market is stuck in a range, it’s best to sit/observe & protect your capital
8) Follow your stop loss
- Always follow your stop loss no matter what
- If a trade doesn’t feel right, cut it
- Losses are a part of trading. It’s important to never let one loss affect your mental and capital ability to take the next trade
- Always follow your stop loss no matter what
- If a trade doesn’t feel right, cut it
- Losses are a part of trading. It’s important to never let one loss affect your mental and capital ability to take the next trade
9) Formulate a plan and follow it
- You MUST have a plan before you enter a trade
- A plan consists of a trigger, target, and stop-loss
- Create a plan, execute your trade, secure the profit or loss, and move on
- Accept all outcomes before you enter a trade
- You MUST have a plan before you enter a trade
- A plan consists of a trigger, target, and stop-loss
- Create a plan, execute your trade, secure the profit or loss, and move on
- Accept all outcomes before you enter a trade
10) Study and learn from your mistakes
- Journal & study your trades every day
- A losing trade is only a loss if you didn’t take the time to learn from it
- The road to consistency always begins with losses/mistakes so don’t be discouraged if you struggle in the beginning
- Journal & study your trades every day
- A losing trade is only a loss if you didn’t take the time to learn from it
- The road to consistency always begins with losses/mistakes so don’t be discouraged if you struggle in the beginning
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