Day Trading Rules

Rules and Regulations are an everyday thing. Once established, adherence becomes easier as the day goes by. It becomes an habit to follow the rules especially when the consequences of not following it are heavier.

Why is it then that traders find it difficult to follow rules ? The answer is simple. Traders do not either have an established rule book OR they are just simply gambling their hard earned money away.

There is no successful trader without a RULE. You did often hear traders say, “ I broke my rule and paid dearly for it” OR “ I should I have followed my rule”.

Here are some few rules IF adhered to consistently will make anyone a better trader.

RULE I: Trading is NOT a get rich quick scheme. Trade with a purpose. No GAMBLING.

Never approach trading with the mentality of “get rich quick” “
in and out”. IF your Doctor is in school for more than 4 years studying, why will you expect to be a perfect trader in one year. Trading requires patience. Set your goal. What do you expect to achieve in trading ?

RULE II: Define ENTRY, STOP LOSS, TARGET/EXIT even before entering the trade. NO EMOTIONS.

Without setting your parameters, you did just be gambling. You HAVE to set your trade before taking them. Will it go against you ? YES. The more you are comfortable with your system ~ the better.

RULE III: Always EXIT at STOP LOSS. You will sell at TARGET, so respect STOP LOSS.

Respect is reciprocal. The market is not your father’s tuff. Why will you then NOT respect your stop loss or your targets. If a trade is going your way, move your STOPS. IF you get stopped OUT, move on. There is always new trades out there.

https://youtube.com/shorts/R94rqkH8M8M?si=LjKXdRjcaX5WIfkx

RULE IV: PRESERVE your capital. Don’t RISK more than 2~3 % of your CAPITAL.

Do not risk more than you can afford to lose. Risking too much means you might be wiped out quicker than you can imagine.

RULE V: No EMOTIONS. No GREED. Book Profit or Loss and MOVE on.

The psychology behind your trading will determine how far you will go. Do not be pre-occupied with greed. Book your profit [ Day Trading, Swing Trading OR Long Term] and move on. Do not trade with emotions, rather trade with clear mind.

RULE VI: No attachment to a single STOCK.

An attachment to one particular stock is a disaster in the waiting. It may always follow your plans for a longer period and over confidence sweeps in ~ then it doesn’t follow your plan.

Rule Book