“To operate successfully in the stock market, the trader must adopt clear rules and follow them faithfully. The rules set out below are based on my personal experience, and who will not easily succeed.”
To operate successfully in the stock market, the trader must adopt clear rules and follow them faithfully. The rules set out below are based on my personal experience, and who will not easily succeed.
1. As the capital of use: Divide your capital into 10 equal parts and never risk more than a tenth of your capital in a single motion;
2. Use orders “stop loss”. Always protect your every transaction with a stop loss order 3 or 5 points below;
3. not to do too many things: it may be in conflict with the rule on the use of capital;
4. do not let a profit turn into a loss. After earning a profit of more than 3% raise your stop loss order to protect your investment;
5. not go against the trend. Do not buy or sell unless you have verified the trend with your graphics;
6. when in doubt get out of the market, and likewise do not get in;
7. work only on shares with a good price dynamics. Stay away from those that move slowly;
8. Distribute your own risk. If you can work on 4 or 5 actions. Avoid putting all your capital on the same action;
9. never give limit orders: work at the market price;
10. Do not close your position without a good reason, but always put the stop loss to protect profits;
11. accumulate a surplus. After a series of transactions closed in profit, put a little ‘money in an account reserved for your stock market profits, to be used only in emergencies or in times of panic;
12. never buy just for the cash dividend;
13. do not ever mean to the bottom. This is one of the worst mistakes a trader can do;
14. Never get out of the market just because you no longer have patience, and likewise do not go just because you are no longer able to wait;
15. avoid taking small profits and big losses;
16. do not ever cancel a stop loss order after you gave when you made the transaction;
17. avoid to enter and exit the market too often;
18. try to be able to go short as you are able to go along. Follow the trend and make money;
19. Never buy just because the price of a share is low, and likewise do not go short just because the price is high;
20. you look not to “pyramid” (reinvest gains achieved in the purchase of securities on the upside to acquire other securities) at the wrong time. Wait until the action has broken resistance levels before buying again, and wait until it has violated the levels of distribution before selling again;
21. choose the action with little float to the “pyramid” buying, and actions to float off with the “pyramid” selling short;
22. say never to “hedging” of your positions. Are you long for action, and this begins to fall, not to sell another short to cover them. Exit from the market, take the loss and wait for another opportunity;
23. Do not change your position on the market without a good reason. When you do a task, keep it on the basis of a reasoning based or as one of your previous plan, and then do not close without a clear indication that the trend has changed;
24. avoid increasing the number of operations for you after a long period of success or a period of transactions closed with profit.
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