If You Are Determined To Be A Successful Trader, You Should Know The Fundamental Rules Of Success. There Are Ten Key Professional Trading Rules. Amateur Traders Get into Trouble When They Trade On Emotions Instead Of Rules.
- Setting up a Trading Plan: A Systematic Method for Screening and evaluating trading opportunity. Determining The Amount Of Risk That Is Or Should Be Taken, And Formulating Short And Long-Term Objectives. A Successful Trading Plan Will Also Involve Details Like The Type Of Trading System To Be Used. Old Saying In Business: “Fail To Plan And You Plan To Fail. Having A Solid Trading Plan In Place Is Vital When Entering A Position.
- Treating Trading as a Business: Most Traders Start Out On The Wrong Path Right Out Of The Gate By Treating Their Trading Like A Trip To The Casino Rather Than A Business That Requires Structure And Planning. Treat Trading Like A Business In Order To Be Successful, One Must Approach Trading As A Full- Or Part-Time Business – Not As A Hobby Or A Job.
- Using Technology in Trading: Standard for Professional Trading Platforms by Anticipating the Needs of Our Users to Deliver Solutions That Give Traders an Edge. Good And Fast Responsive Trading Platforms, Customizable Charting Platform, In Built Risk Control Environment, Algo Or Machine Trading Or AI Trading Systems Are Examples Of Technologies In Trading.
- Protecting Trading Capital: Money Management Is A Concept That Protects Your Trading Capital From Losing Trades And It Is The Most Important Skill For Trading. Risk Management Is the Difference between Success and Failure When Trading in market. It Refers To Stop Placement and Will Minimize Any Losses and You Will Have Them But Also Maximize Any Profits and This Stop Is Called A Trailing, Maintenance or Profit Stop. Money Management Optimizes Capital Usage.
- Understanding Stock Market: Once you’ve come to Grasp These Concepts and Understand What Makes the Stock Market move, The Hope Is That You’ll Become a Smarter, More Informed, And Savvy Investor. You Understand The Basics Of How The Stock Market Works And Why Stocks React As They Do. Understanding Stock Market Basics Is Essential To Trading Success. Whether you’re A New Trader or Need a Refresher, Understanding the Stock Market Is Key.
- Following perfect Risk Plan: Every Successful Business Has a Business Risk Management Plan. And Stock Trading Is A Business! Every Prudent Business-Person Wants To First Cover His Overhead Expense Each Month, And Then Concentrate On Achieving A Steady Growth In Earnings. Create An Unprecedented Opportunity For Growing Your Trading Account In An Optimal Way. Risk Management Is Widely Recognized Among Professional Traders To Be The Most Important Aspect Of Your Trading Plan. Properly Managing Your Risk, Or Improving Your Current Risk Management System, Can Improve Your Profitability Just As Much As Sharpening Your Trading Skills.
- Making Stop Loss as a Compulsion: A Stop-Loss Order Is An Order Placed With A Broker To Sell A Security When It Reaches A Certain Price. Stop Loss Orders Are Designed To Limit An Investor’s Loss On A Position In A Security. Most Important Tenets Of A Successful Trader Is To Limit The Losses In Such A Situation, And The Way To Do That Is By Setting A Stop Loss. For Novice Traders, Stop Loss Is A Price At Which You Exit Your Trade When It Turns Against You. Some Of The Best Risk Managers In The World Never Risk More Than 2% Of Their Portfolio On A Single Stock.
- Fact Based Trading System: A Trading System Is A Group Of Specific Parameters That Combine To Create Buy And Sell Signals For A Given Security. A Trading System Is A Set Of Rules That Can Be Based On Technical Indicators Or Fundamental Analysis. A Trading System Tells the Trader When and How To Trade. In Many Cases, A Trading System Is Like A Blueprint For Trading. Trading Systems Or A Trading Strategy Is The Backbone For All Types Of Traders. Without A Trading System Or A Strategy A Trader Has Nothing Else To Do But To Sit On Their Hands.
- Trading Focus: The Importance Of Sticking With A Style Is Going To Determine Whether You Are Successful Or Not. If You Want A Million Dollars Trading, Don’t Focus On The Money But On Trading Plan And Its Execution. Trading Focus Is Vital In Order To Have Trading Success. Without It, Stupid Trading Mistakes Can Eat Your Trading Account. Traders Must Stay Focused And Rational Through A Losing Streak, And Not Let The Loss Of Capital Affect Their Judgment Which Will Make Matters Worse. It Requires A Mental Toughness To Stay Focused On Executing The Trading Plan Or To Realize That The Market Isn’t Providing You With Good Opportunities.
- Stop Trading: There Are Two Major Reasons To Stop Trading, One Is Ineffective Trading Plan And Other One Is Ineffective Trader. If Your Closed And/or Open Position Losses Exceed This Dollar Amount, Close All Day Trades, Cancel All Day Trading Orders And Stop Trading For The Day. If You’re An Experienced Trader With A Track Record, Then Use The Dollar Amount Of Your Average Profitable Day Over A 30 Day Rolling Period As Your Daily Stop Loss. Ineffective Trading Plan Produces More Losses Than Expected While Ineffective Trader Is One Who Unable To Follow Trading Plan And Rules. External Stress Factors, Poor Trading Habits And Lack Of Physical Activity Are Some Of The Major Factors.
Becoming A Successful Trader Is Not As Difficult Or Elusive As You Probably Think Right Now. All That Is Required Is Several Changes In Your Behavior And More Importantly, In Your Thinking. So Make These 10 Rules As Your Trading Habits And Get Results Directly Reflected In Your Trading Account.