10 Golden Rules For Stock Market Trading Success

Your stock trading rules are your money When you follow your
rules you make money However if you break your own stock
trading rules the most likely outcome is that you will lose
money
Once you have a reliable set of stock trading rules it is
important to keep them in mind Here is one discipline that can
reap rewards Read these rules before your day starts and also
read the rules when your day ends
Rule 1: I must follow my rules
Naturally if you develop a set of rules they are to be followed
It is human nature to want to vary or break rules and it takes
discipline to continue to act in accordance with the established
rules
Rule 2: I will never risk more than 3% of my total portfolio on
any one stock trade
There are many old traders There are many bold traders But
there are never any old bold traders Protecting your capital
base is fundamental to successful stock market trading over time
Rule 3: I will cut my losses at 5% to 15% when I am wrong
without question
Some traders have an even lower tolerance for loss The key
point here is to have set points (stop loss) within the limits
of your tolerance for loss Stay informed about the performance
of you stock and stick to your stop loss point
Rule 4: Never set price targets
This is a style that will allow me to get the most out of rising
stocks Simply let the profits run Realistically, I can never
pick tops Never feel a stock has risen too high too quickly Be
willing to give back a good percentage of profits in the hope of
much bigger profits
The big money is made from trading the really BIG moves that I
can occasionally catch
Rule 5: Master one style
Keep learning and getting better at this one method of trading
Never jump from one trading style to another Master one style
rather than become average at implementing several styles
Rule 6: Let price and volume be my guides
Never listen to any opinion about the stock market or individual
stocks you are considering trading or are already trading
Everything is reflected in the price and volume
Rule 7: Take all valid signals that show up
Don’t make excuses If an entry signal shows up you have no
excuse not to take it
Rule 8: Never trade from intra-day data There is always stock
price variation within the course of any trading day Relying on
this data for momentum trading can lead to some wrong decisions
Rule 9: Take time out
Successful stock trading isn’t solely about trading It’s also
about emotional strength and physical fitness Reduce the stress
every day by taking time off the computer and working on other
areas A stressful trader will not make it in the long term
Rule 10: Be an above average trader
In order to succeed in the stock market you don’t need to do
anything exceptional You simply need to not do what the average
trader does The average trader is inconsistent and
undisciplined Ask yourself every day, “Did I follow my method
today?” If your answer is no then you are in trouble and it’s
time to recommit yourself to your stock trading rules

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