Through your trading carrier, you will learn to develop your own paths and ways to become successful in your own way, but there are many things that will give you a boost of knowledge in your trading carrier. Down bellow lists 11 different rules I have gathered from many sources.
Rule 1: Price has memory.
What happened the last time a stock hit a certain level? Chances are it will happen
again. Watch trades closely when price returns to a battleground. The prior action can
predict the future.
Rule 2: Profit and discomfort stand side by side.
Find the setup that scares you the most. That’s the one you need to trade. Don’t
expect it to feel good until you take your profit. If it did, everyone else would be
trading it. Wisdom from the East: What at first brings pleasure in the end gives only
pain, but what at first causes pain ends up in great pleasure.
Rule 3: Stand apart from the crowd at all times.
Trade ahead, behind or contrary to the crowd. Be the first in and out of the profit
door. Your job is to take their money before they take yours. Be ready to pounce on
ill-advised decisions, poor judgment and bad timing. Your success depends on the
misfortune of others.
Rule 4: Buy at support. Sell at resistance.
Trend has only two choices upon reaching a barrier: Continue forward or reverse. Get
it right and start counting your money.
Rule 5: Manage time as efficiently as price.
Time is money in the markets. Profit relates to the amount of time set aside for
analysis. Know your holding period for every trade. And watch the clock to become a
market survivor.
Rule 6: Don’t confuse execution with opportunity.
Save Donkey Kong for the weekend. Pretty colors and fast fingers don’t make
successful careers. Understanding price behavior and market mechanics does. Learn
what a good trade looks like before falling in love with the software.
Rule 7: Control risk before seeking reward.
Wear your market chastity belt at all times. Attention to profit is a sign of immaturity,
while attention to loss is a sign of experience. The markets have no intention of
offering money to those who do not earn it.
Rule 8: Big losses rarely come without warning.
You have no one to blame but yourself. The chart told you to leave, the news told you
to leave and your mother told you to leave. Learn to visualize trouble and head for
safety with only a few bars of information.
Rule 9: Enter in mild times, exit in wild times.
The big move hides beyond the extremes of price congestion. Don’t count on the
agitated crowd for your trading signals. It’s usually way too late by the time they act.
Rule 10: Perfect patterns carry the greatest risk for failure.
Demand bruises on your trade setups. Market mechanics work to defeat the
majority when everyone sees the same thing at the same time. When perfection
appears, look for the failure signal.
Rule 11: See the exit door before the trade.
Assume the market will reverse the minute you get filled. You’re in very big trouble
when it’s a long way to the door. Never toss a coin in the fountain and hope your
dreams will come true.
Yours truly,
Jacob Schildcrout
**Note, I dont take credit for these rules, these have been gathered from sources for your convenience***