90 Golden Rules of Trading

My 90 golden rules of trading

General Rules

  1. Always limit my losses, by applying strict money and risk management.

  2. Do not break the rules as set out in this plan.

    1. If I do I am not allowed to trade for 1 week

    2. If I don’t break the rules for every trade I will reward myself with a coffee with Nina and cuddles with Mia.

    3. Always plan the trades and trade the plan!

  3. I will always follow rules No 1 and 2

  4. Remember that a bear market will give back in one month what a bull market has taken three months to build.

Psychology

  1. I believe that successful trading is a learned SKILL. It is both a science and an art and consistent profitability is achievable and duplicateable.
  2. My success is unlimited. I can achieve anything. Where others see impossibility, I see unlimited opportunity.
  3. I believe that financial markets are 100% psychology driven – not the other way around.
  4. Price patterns are a reflection of the collective psychology of a large number of traders
  5. My mental state the largest element of my trading edge and the key to my success. I must be rested, fit, healthy and mentally alert. Accepting the stress of trading by keeping focussed, calm, disciplined and not distracted is essential for being a professional trader. I will constantly assess and adjust my trading state in order to maintain a mindset conducive to greatness.
  6. Negative emotions are my biggest enemy and I can train myself to subconsciously focus only following my plan and never to focus on wins and losses.
  7. I am highly disciplined trader committed to trading only for profit and strictly adhering to my plan: strategies, rules and SOPs.
  8. My style of trading is
    1. medium aggressive as I prefer to wait for the relative extremes to increase my odds.
    2. Technically driven by supply and demand levels
  9. I am trading all three styles day-, swing- and position trading outright.
  10. I will not have a bias as to where the market may or may not head. I will analyse price patterns objectively and act according to my plan.
  11. I trade what I see, not what I think!
  12. I understand I cannot control the market. I can only control myself.
  13. Losses are acceptable and statistically expected. I will minimise them by exercising compliance to my own rules, avoiding impulse trades and never, ever trading without a stop.
  14. Trading in my business and I am here to make a large profit from it. The market will pay for my family’s life and retirement

 

  1. I have the skills to be a lifelong successful trader: passion, diligence, patience, discipline, determination and will channel them into successful trading.
  2. Making money in the Market is a tough and good and honourable profession that only the toughest will prevail doing.
  3. I can trade any instrument and strategy I want.
  4. Trading will enable me to give back to the world that needs it.
  5. I never let anyone talk me in or out of a trade

  6. I do not overtrade and am patient – I wait for the extremes! I will zoom out and check the weekly curve to ensure I am aiming for an extreme. Set the alarm and move on.

  7. When I learn something new or experience a new situation, I make a note of it in the journal and look to create a rule so I can consistently manage it in the future.

  8. The key is to find consistency doing something that works – through rules and discipline.

  9. It is not about the system, it is about believing in my rules and my plan.

  10. I always keep a positive attitude, no matter how much I lose.

  11. I don’t take the market home

  12. Successful traders buy into bad news and sell into good news.

  13. Successful traders are not afraid to buy high and sell low.

  14. Successful traders have a well-scheduled planned time for studying the markets.

  15. Successful traders isolate themselves from the opinions of others.

  16. I never get into the market because I am anxious because of waiting.

  17. I avoid getting in or out of the market too often

  18. Losses make the trader studious – not profits. I take advantage of every loss to improve your knowledge of market action.
  19. The most difficult task in speculation is not prediction but self – control. Successful trading is difficult and frustrating. I am the most important element in the equation for success.
  20. I always discipline myself by following a pre – determined set of rules.
  21. I expect and accept losses gracefully. Those who brood over losses always miss the next opportunity, which more than likely will be profitable.
  22. The key to successful trading is knowing myself and my stress point.
  23. The difference between winners and losers isn’t so much native ability as it is discipline exercised in avoiding mistakes.
  24. In trading as in fencing there are the quick and the dead.
  25. Speech may be silver but silence is golden. Traders with the golden touch do not talk about their success.
  26. I dream big dreams and I think tall. Very few people set goals too high. A man becomes what he thinks about all day long.
  27. I accept failure as a step towards victory.
  28. Have I taken a loss? I forget it quickly. Have I taken a profit? I forget it even quicker! Don’t let ego and greed inhibit clear thinking and hard work.
  29. I cannot do anything about yesterday. When one door closes, another door opens. The greater opportunity always lies through the open door.
  30. The deepest secret for the trader is to subordinate his will to the will of the market. The market is truth as it reflects all forces that bear upon it. As long as I recognize this I am safe. When a trader ignores this, he is lost and doomed.
  31. It’s much easier to put on a trade than to take it off.
  32. If a market doesn’t do what you think it should do, get out.
  33. Beware of large positions that can control my emotions. Don’t be overly aggressive with the market. Treat it gently by allowing your equity to grow steadily rather than in bursts.
  34. You must believe in yourself and your judgment if you expect to make a living at this game.
  35. A loss never bothers me after I take it. Forget it overnight. But being wrong and not taking the loss – that is what does the damage to the pocket book and to the soul.
  36. I will never brag of winnings.
  37. Standing aside is a position.
  38. It is better to be more interested in the market’s reaction to new information than in the piece of news itself.
  39. If I don’t know who I am, the markets are an expensive place to find out.
  40. In the world of money, which is a world shaped by human behaviour nobody has the foggiest notion of what will happen in the future. Mark that word – Nobody! Thus the successful trader does not base moves on what supposedly will happen but reacts instead to what does happen.
  41. Continually strive for
    1. patience,
    2. perseverance,
    3. determination, and
    4. rational action.
  42. When the ship starts to sink, don’t pray – jump.
  43. IT IS A BIG OCEAN OUT THERE. NO ONE CARES ABOUT me
  44. Get your mind right and focus on what is important… TAKING PROFITS.
  45. I shall take all I can and give nothing back.
  46. I visualise my trophy trades regularly.
  47. I must properly in the market and condition my brain to respond in the moment.
  48. Trading for me is SURFING. Waves and currents. In order to win (profit), as a trader, you must be able to determine who is in control at any time.
  49. To paraphrase the principles of Sun Tzu: “What you do determines whether you lose. What the market does determines whether you profit.”
  50. I will master the simple and stay focused! That’s all I need to profit in the market.

Trade Management

  1. Always follow the rules for trade entry and management

    1. Always perform the complete analysis process

    2. Always enter trades with bracket orders. That ensures all targets and stops are in place at entry. Do not enter with a market order if possible.

    3. Never EVER trade without a stop.

  2. Look left for levels, then look left again

  3. Always maintain discipline in every regard at all times as it relates to executing my trading plan. I am a professional, full time trader. I am interested in profit. Trading is my business.

  4. Avoid impulse trading. Plan the trade and trade the plan.

  5. IPDE: Identify, Predict, Decide and Execute

  6. Get the SETR (Stop, Entry, Target) info for every trade

  7. If the internet goes down I call the broker to go flat. Then work on technical challenges to go back on online.

  8. Keep it simple and always look to simply further.

  9. Document and review every trade taken, every day.

  10. Don’t ever allow a big winning trade to turn into a loser by taking profits and moving stops. Stop yourself out if the market moves against you 20% from your peak profit point.
  11. You must have a program, you must know your program, and you must follow your program.
  12. Except in unusual circumstances, get in the habit of taking your profit too soon. Don’t torment yourself if a trade continues winning without you. Chances are it won’t continue long. If it does, console yourself by thinking of all the times when liquidating early reserved the gains that you would have otherwise lost.
  13. The action is fast sometimes and you have no time to THINK.

Risk and Money Management:

  1. Limit your losses – use stops !

  2. Never Cancel a stop loss order after you have placed it!

  3. Never enter a trade without a stop

  4. For swing trades trade only the BEST (=RRR) & EXTREME Levels!

  5. Do not

    1. Day trade: Monday in the 1st hour, 15min before and after a news announcement and before 10 am (?)

    2. Swing Trade: Friday after lunch

    3. Position Trade: with any bias

  6. Watch out for red new items and set alarms, every morning

  7. Split your profits right down the middle and never risk more then 50% of them again in the market.
  1. Capital Preservation:

    1. any more than two full stop outs per day – stop trading!

    2. I will never move my stop loss away from my entry, only ever towards or past it

    3. Always perform position sizing analysis (esp pip value for Cross Pairs)

    4. 2 red days in a row and stop trading for the remainder of the week and look at failed trades

    5. Never add to a losing position.

  2. Of all speculative blunders, there are few greater than selling what shows a profit and keeping what shows a loss.
  3. Lose your opinion – not your money.

 

These are my promises to myself – if I break them I must be kind to my account and stop trading, because I know that..

1. Anything can happen

2. You don’t need to know what is going to happen next in order to make money

3. There is a random distribution between wins and losses for any given set of variables (=confluences), that define an edge

4. An edge is nothing more than an indication of higher probability of one thing happening over another

5. Every moment in the market is unique

 

(Adapted from Linda Bradford Raschke, TRO, Mark Douglas and other great traders)

 

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