My Golden Trading Rules

Patience and discipline

  • Wait for the trade come to you. The idea is to make money consistently because you are patient and disciplined and don't over-trade. Protect your assets and trade only when the odds are in your favor. Trade when a situation is a high-percentage situation and back away from all other trades. WAIT FOR THE STOCK TO COME TO YOU !!
  • There is no need to over-trade. Every trade costs commissions, and losses can add up dramatically. A few profitable quality trades brings profits need with low volatility for your account. This rule is used in both trading styles. 
  • Patience and discipline **Bears repeating**
  • Capital Preservation (Limit losses), Always take a loss quickly and hopefully mitigate your losses, do not become emotionally attached to a stock.
  • Do not trade if your head is not in the game!

My Day Trading Rules

  • Order routing is the #1 Most important part of day-trading. Get to know your trading tools well with small lots of stock before you risk large amounts of your hard earned capital.
  • Always, limit your losses, use stop orders.
  • Learn from the losses - take advantage of each loss to improve your knowledge of the market.
  • Never allow large profits to turn into losses.
  • If the markets on a given day are not performing or reacting the way you expected, it is best to simply get out.
  • Never add to a losing position. It is a prescription for disaster.
  • Try to predict the general direction of a stock price, estimate (but do not be anal about) tops and bottoms. You will rarely succeed in accomplishing this, as a general rule.
  1.  Remember that standing aside is a position and often the best one to take if you cannot form an opinion as to where the market is heading on a given day.
  2. The key difference between winning and losing day traders is the ability to exercise discipline to avoid mistakes or bad trading tactics.
  3. You must subordinate your will to the will of the market. The market is always right. Fundamentals, play a subordinate role when day trading.
  4. Always keep records of your trading results and analyze the results.
  5. Generally sell into good news and buy on bad news. There are exceptions
  6. Patience, perseverance, determination and an rational trading plan are the key attributes Never get emotionally involved with your trades as emotions often work against you.
  7. Do not try to profit on every trade. It is the total profit you make that matters not the number of individual wins. (Be quick to take a LOSS, do not let a small $100 loss turn into a $500-1000+ loss)
  8. Don't chase STOCKS and momentum if you are unsure as to the exit point. Assume the market will reverse itself as soon as you open a position. It usually does if you are not prepared.
  9. Decide each day how much risk you are willing to take and stick to your decision.
  10. Remember Rule#1 Access to timely information and fast execution of trades is essential to day trade successfully. Subscribe to a good financial information service and open an account with a Direct Access Trading firm or an online broker that caters to day traders. (Speed is very important, more so that cost of a trade). Refer to Table "Day Trading Profit Table)
  11. Do not try to focus on too many stocks at once. Limit your focus to a manageable number.
  12. Always think positive no matter how much you lose, Hard, to do but a MUST !!!Accept your losses gracefully, try to learn from them and move on. READ the Golden Rules when in doubt !