Rules for being a successful trader – Do’s and Don’ts

First the “Do’s”

Patience:
Wait for high probability opportunities to materialize based on technical analysis (chart patterns, volume, major indexes)

Strategy:
Have a plan to limit your losses and let your profits run.

Dicipline:
Have a plan and stick to it. Don’t get emotional if your trade doesn’t go as planned.

Expertise:
Do your homework and be prepared. Know the stocks you’re trading. (highs, lows, news, support, resistance)

Risk Control:
Have a highly controlled risk/reward ratio. Don’t get too greedy.

State of Mind:
Stay positive, relaxed, focused, confident, resourceful. Have a high level of self-esteem and trust.

Goals:
Trading stocks should be enjoyable and you should want to do it for the long term. You must be in a frame of mind which allows you to enjoy the process effortlessly without a constant state of conflict with yourself so you can make good judgements.

Now the “Don’ts”

Patience:
Making trades on personal whims and trying to gain instant gratification.

Strategy:
Does not rely on consistent methodolgy.

Discipline:
Not cutting losses and hanging on to losers. Often confused on what to do.

Expertise:
Unprepared and little market knowledge.

Risk Control:
No game plan and control over risk/reward ratio.

State of Mind:
Nervous, anxious, scared, panicky, unsure.

Goals:
Want to make a quick dollar and tackle every stock that moves. Setting a certain dollar amount you should make each day.

Next Level Trading