STOCK MARKET TRADING GUIDELINES

STOCK MARKET TRADING GUIDELINES  Develop a Trading Plan based on Technical Analysis. If you do not have a plan, you are gambling… Trading is based on probabilities, and technical analysis will provide you with an edge… Technical Analysis organizes collective behavior into identifiable chart patterns that will supply you with an endless stream of opportunities in market trading…  Develop a set of well-defined Trading Rules based on your trading plan… If you swing trade, manage your risk by using trailing stops… If you day trade, monitor your positions and have a mental point of entry and exit… Be clear about how much you are willing to lose…  Be disciplined and abide by your trading rules… Do not allow fear and greed to take over your emotions, because that is when you will break your rules and make mistakes…

Mistakes will cost you money and will diminish your trading capital…  Wisdom is acquired by experience… There is no easy path to becoming a successful stock trader… You will obtain information to make your journey simpler; but it is up to you to diligently observe the charts and to learn from the market’s movements… Learn from your mistakes; do not repeat erroneous trades or strategies and expect a different result…  It can be easier to lose money in the stock market than it is to make money… Be selective and limit your trades to only high probability trades, based on your trading system and rules!!!

Patience is a virtue in the markets; avoid becoming a neurotic trader…  Do not overtrade, as slippage and whipsaws will most likely hand you a loss… Keep it simple, and always lock in your profits when the market goes in the direction of your trade!!!  No matter how effective your trading strategy is, you will be wrong a certain percentage of the time… Learn to manage your emotional attachment to losses and gains…  Do not be more afraid of making money than losing money, as the market has a bullish bias… Trust and stay with the trend when you have momentum, and do not get spooked out by the micro moves, as price will constantly go up and down…  Learn to identify the trend… If you are losing money, you are countertrading… The shorter the trading time frame, the more you expose yourself to emotional whipsaws and losses…

Diversify and limit your size to not more than 5% of total assets in any position so that fear does not become the prevailing instinct guiding your judgment…  Do not search for a magic system through outside sources, be suspicious of “experts”, and do not piggyback on anyone else’s advice, because the Holy Grail of trading is within you…  Markets act counter-intuitively; do not think about what the market will or will not do, and understand that the market is erratic, random and unpredictable… Learn to trade like a machine: emotionless…  If long, always buy low and sell high, and the opposite if short… Do not allow fear and uncertainty to freeze you, trade swiftly and with confidence!!! Hope and prayer is not a strategy…  Successful trading is not only about using the correct indicators, or being familiarized with technical analysis, or trading in the correct asset class; it is achieved only when you learn to control your emotions…