My Rules But Maybe Not Yours or Works in Any Time Frame by Officer NotFlargg
1. Cut your losses and let your winners run. Corollary: Be willing to make more than you are willing to lose. Corollary: You can let your winner run and take a profit at the same time if you get out of part of the winning trade the first time the stock retraces. Corollary: It's OK to add to a winning position. Corollary: Know your reward/risk ratio before you make the trade. Corollary: Maintain a tight stop on every average up or average down and exit that position the moment the market tells you you're wrong. Corollary: Choose to take a small loss before you have no choice but to take a big loss.
2. Let your strategy fit the stock - don't try to force a trade into your strategy. Corollary: Let the trade come to you, don't force yourself into a trade that you don't like.
3. Only play with what you can lose without getting sent back to Square One.
4. Get the right entry point and the exit point will take care of itself.
5. Exit a long position when you would go short. Exit a short position when you would go long. Corollary: If you are short and wish you were long, or long and wish you were short, exit the trade.
6. Learn something every day. Corollary: The lucky smart people will eventually take the money from the lucky dumb people. Corollary: Don’t assume you are smarter than the person on the other side of your trade. Corollary: Just because you can't understand it, don't assume nobody else can either. Corollary: If you don’t know who the fool is, the fool might be you. Corollary: If you are coasting, you are moving downhill. Corollary: Friends are a better thing to have than money.
7. Have the discipline to see what is happening, not what you thought should have happened or what you hope might happen. Corollary: The market doesn’t care if you have a headache. Corollary: If you can't read the chart accurately, stop or find a chart you can read. Corollary: You can be “right” and still lose money.
8. Don’t trade on emotions. Corollary: Leave “market psychology” for the rookie that is taking you out of your winning position. Corollary: If you must be emotional, then fear a loss and hope for a profit - don't hope for a smaller loss and fear a smaller profit.
9. If good things are a result of your genius, then it’s your fault if things go wrong. Corollary: To see who is responsible for everything you do, look in the nearest mirror. Corollary: If it’s not fun for you, it’s probably not good for your overall net worth.
10. Make your own rules and then stick to them. Corollary: You can break your rules and get away with it until The Moment of Gigantic Anguish and Subsequent Horrible Pain. Corollary: The more rules you break, the riskier the transaction. Corollary: The money eventually goes to the guy with the best plan, no matter how dumb he is. Corollary: If you consistently break your own rule and win, change the rule. |
