1. Trade like a guerilla warrior
You must learn to adapt quickly to changes. If the winning side is changing, don't hesitate to join the new party and to commit all your forces to this side (capital ,mental, emotional)...until the market conditions change. Don't get married to trades
2. Be disciplined
Create a game plan then stick to it. A trade does not simply consist of a position. It consists of a position plus reasons for having the position plus a stop loss level plus profit taking levels. In the long run your discipline will save you when markets get rough.
3 Buy high...Sell higher - Sell Low...Buy Lower
Do not try to bottom fish or pick tops. When you think you know the trend then follow it.
4 Think big picture but trade like a technical analyst
You must understand the fundamentals behind your investment ideas but you need to understand the Technical Analysis too. When your fundamental and technical signals point to the same direction...you have a good chance to have a winning trade.
5 Do not use excessively tight stop losses
Spend more time identifying a good entry point. Be patient. Give some freedom to the market. Place your stop losses carefully.
6 Hit your stops
The first stop is the cheapest stop on a losing position. Do not follow the temptation to "hang onto" a losing position that has gone through your stop loss level. It might work a few times but one day you will be hammered if you trade without discipline.
7 In a Bull market...Be Long or Neutral - in a Bear market ...Be Short or Neutral
A lot of people forget this rule and trade against the trend by calling for short term changes in market conditions. This usually causes psychological imbalance and frequently leads to losses.
8 Go for the most powerful market trend
Do not focus too much on markets where the trend is not strong enough or the market is range bound or choppy. Commit your forces to the stronger trend.
9 Accept losses they are part of the game
Prepare yourself mentally and emotionally for this eventuality. Take some time off and come back fresh if you have been hit hard. Do not fight with the trade, curse the market or make some bargain with yourself (...if the market goes to my initial level I will get out... ! ).
10 Resist the urge to trade against the trend too early
The trend is usually right (fundamentally). Be patient. Wait for the trend to turn. When the fundamentals and technicals are turning to the other direction, wait a bit longer then enter.
You must learn to adapt quickly to changes. If the winning side is changing, don't hesitate to join the new party and to commit all your forces to this side (capital ,mental, emotional)...until the market conditions change. Don't get married to trades
2. Be disciplined
Create a game plan then stick to it. A trade does not simply consist of a position. It consists of a position plus reasons for having the position plus a stop loss level plus profit taking levels. In the long run your discipline will save you when markets get rough.
3 Buy high...Sell higher - Sell Low...Buy Lower
Do not try to bottom fish or pick tops. When you think you know the trend then follow it.
4 Think big picture but trade like a technical analyst
You must understand the fundamentals behind your investment ideas but you need to understand the Technical Analysis too. When your fundamental and technical signals point to the same direction...you have a good chance to have a winning trade.
5 Do not use excessively tight stop losses
Spend more time identifying a good entry point. Be patient. Give some freedom to the market. Place your stop losses carefully.
6 Hit your stops
The first stop is the cheapest stop on a losing position. Do not follow the temptation to "hang onto" a losing position that has gone through your stop loss level. It might work a few times but one day you will be hammered if you trade without discipline.
7 In a Bull market...Be Long or Neutral - in a Bear market ...Be Short or Neutral
A lot of people forget this rule and trade against the trend by calling for short term changes in market conditions. This usually causes psychological imbalance and frequently leads to losses.
8 Go for the most powerful market trend
Do not focus too much on markets where the trend is not strong enough or the market is range bound or choppy. Commit your forces to the stronger trend.
9 Accept losses they are part of the game
Prepare yourself mentally and emotionally for this eventuality. Take some time off and come back fresh if you have been hit hard. Do not fight with the trade, curse the market or make some bargain with yourself (...if the market goes to my initial level I will get out... ! ).
10 Resist the urge to trade against the trend too early
The trend is usually right (fundamentally). Be patient. Wait for the trend to turn. When the fundamentals and technicals are turning to the other direction, wait a bit longer then enter.
Points to be remember
- Always respect market do trade only with market direction
- Never over trade many trader loose money by leveraging
- Do not lose more than 3% of capital in single trade
- Always put stop loss
- Always watch trend for some time before doing trade
- Don't give ear to rumours
- Always do little homework before doing trade and trade only in share which you knows
- Always book profit as well as loss
- Majority days the trading range will range will below so do not wait for big return on single day
- Market is always right you are wrong