Hello, everyone, today in this article we will discuss the 10 golden rules for successful stock trading.
10 Mantras for successful stock trade.
Your stock trading rules are your money. When you follow your rules, you make money.
But, if you break your stock trading rules, the most likely outcome is that you can lose money.
Once you have a reliable set of stock trading rules, it is vital to keep them in mind.
Here is one discipline that can reap rewards.
Read these rules before your day starts, and additionally read the rules when your day ends.
10 Golden Rules for Successful short-term Trading
Rule 1: you must follow your 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 following the established rules.
Rule 2:you should never risk more than 3% of your 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: You should cut your losses at 5% to 15% when you go wrong in any trade.
Some traders have an even lower tolerance for loss.
The key purpose here is to have set points (stop loss) within the limits of your tolerance for loss.
Stay informed about the performance of your stock and stick to your stop-loss point.
Rule 4: You should Never set price targets.
This is a style that will allow you to get the most out of rising stocks.
Simply let the profits run. Realistically, You 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 cash is made from trading the BIG moves that you can occasionally catch.
Rule 5: Master one style.
Keep learning and getting better at this one style of trading. Never jump from one trading style to another. Master your one style rather than become average at implementing several styles.
Rule 6: Let price and volume be your 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 intraday data.
0There is always stock price variation within any trading day. Relying on this data for momentum trading can lead to some wrong decisions.
Rule 9: Take time out.
Successful stock trading is not solely about trading. It’s also about emotional strength and physical fitness. Reduce 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 or the future.
Rule 10: Be an above-average trader.
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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