11th Mar 2010
Trading Skills – 10 Basic Trading Rules To Improve Your Trading Skills
1. Never, ever add to a losing position or “average down”
2. Never, ever initiate or add to a trade without also simultaneously initiating or adding to a stop to get you out if you are wrong.
3. Never, ever cancel or move a stop except in the desired direction of the trade.
4. Never, ever allow a small, reasonable loss to become a large catastrophic loss. Get out, and come back to fight another time.
5. Never, ever allow yourself to lose more than 10% of your trading capital on a single trade or any single day.
6. Don’t pick tops and bottoms, let them pick themselves.
7. Don’t step in front of freight trains. If a market is exploding in a certain direction, don’t position yourself against it until there is strong evidence that a turn has already occurred (not that it will or should, but it has).
8. Stay Flexible. Remember that you can be wrong, anything in the world can be wrong from time to time. Remember that you are dealing in high probabilities, not absolute certainties. The more often you are right the more suspectible you become to being inflexible.
9. When in a chop, stop. If you sustain a series of losses, please get out and take some kind of vacation from the market. Let your emotions cool and your head clear.
10. Ask yourself if you at all levels of yourself really want to make money in the markets, and listen carefully to the answer. There are people who have a psychological need to lose, or who just want to play for the action. “Know thyself.”
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Siw Dahl hold’s a Bachelor’s degree in Business Administration and a Master’s degree in Asian Politics and Business. The last past years Siw has worked as Stock Broker with main focus on technical analysis. Now, she is open to share all her trading experience and knowledge to you so you can shortcut your learning curve and ultimately become a trading master in the market.
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