The topic I’m writing about today has nothing to do with the current state of the markets, but everything to do with making money in them.
The reality is that there are certain core competencies you must implement if you want to trade profitably.
Unfortunately, most investors either don’t get it, or worse, simply choose to ignore these fundamentals. Still others understand these rules. And yet, when push comes to shove, they let their emotions get the better of them, which often leads to disastrous results.
Everybody is running to make money fast. The world of stockmarket fascinates us all with small investment with huge returns .
I call the following concepts as "Fifty golden rules of profitable trading.” Follow these time-tested precepts each and every time you trade and invest, and I think you’ll have the essential framework to make money in any market.
1. Divide your capital into 10 equal risk
parts.
2. Never over trade.
3. Never place order for BUY/SELL without stop loss
conditions.
4. Never let profit turn into loss.
5. Trade with the trend.
6. Never take lead you may loose heavily.
7. Never try to be over smart.
8. Don't trade if trend not clear
9. Don't follow tips only.
10. Use the right orders only.
11. Withdraw portion of profits.
12. Don't be whimsical about closing your
trades.
13. Never buy a stock to get dividend.
14. Never average your losses.
15. Take big profits and small losses.
16. Sell short as often as you go long.
17. Never buy any stock just it is low priced.
18. Pyramid your trades correctly.
Pyramid of Trade
19. Decrease your trading after a series of
successful trades.
20. Don't change your opinions during market hours.
21. Don't follow the crowd - they are usually
wrong.
22. Buy on rumor and sell on news.
23. Take windfall gains when you get.
24. Keep your charts up to date.
25. Preserve your capital.
26. Nothing ever new occurs in market.
27. Markets are never wrong opinion may be.
28. Never permit speculative ventures to turn into
investments.
29. Never try to predetermine your profits.
30. Never buy a stock just because it is low priced
or don't sell just because it is high priced.
31. Look for reasonable profits.
32. Buy as soon as a stock makes new highs after a
normal reaction.
33. Ban wishful thinking in the market.
34. Leaders of today may not be leaders of
tomorrow.
35. Don't be too cautious about reasons behind the
moves.
36. Trade only the active stocks.
37. Bear markets have no support and bull markets
have no resistance.
38. The smarter you are the longer it takes.
39. It is very hard to get out of a trade than to
get in.
40. When time is up, markets must reverse.
41. Control what you can; manage what you can not.
42. Big movements take time to develop.
43. A good trade is profitable right from the
start.
44. If you can not make money trading the leading
issues you can not make it trading the overall market.
45. Avoid partnership in trading accounts.
46. The human side of every person is the greatest
enemy of successful trading.
47. Money can not be made every day in the
market.
48. As long as market is acting right don't rush to
take profits.
49. Never buy a stock just because it has fallen
from a great high, nor sell a stock because it is high priced.
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| Pyramid of Trade |
38. The smarter you are the longer it takes.
50. Start young for wealth creation
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