Hi, I'd like to get a general list of trading rules which could apply to any strategy. I'll start the list with some rules that I try to follow: 1. Take trades in the direction of the larger trend. Since I'm strictly a day-trader, the larger trend to me is based on 10 min and 60 min. charts. A swing trader might want to focus on Daily and Weekly charts. 2. Try to trade with the overall market direction based on market breadth indicators suck as TICK/TRIN, A/D etc, & direction of Dow. 3. Never enter a trade based on 'gut' feel alone. 4. When in doubt, stay out! 5. If one of your analysis tools is not working, e.g. charting platform issues, datafeed prblems, connectivity issues, DO NOT TRADE 6. If you're sick, take a day off or simply watch the market. DO NOT TRADE when you're not physically and mentally prepared. 7. Try to get at least 7 hours of sleep. 8. Do not trade due to boredom. Leave the PC, take a break, go outside. Do not trade due to boredom. I might add to this list later on, but would like you all to post some nuggets of wisdom. Some rules you all try to follow on an everyday basis. Rules that really make your trading consistent. Thanks, -FastTrader
Taken from www.hardrightedge.com: Link to full article: http://www.hardrightedge.com/wheel/tcrules1.htm 1. Forget the news, remember the chart. You're not smart enough to know how news will affect price. The chart already knows the news is coming. 2. Buy the first pullback from a new high. Sell the first pullback from a new low. There's always a crowd that missed the first boat. 3. Buy at support, sell at resistance. Everyone sees the same thing and they're all just waiting to jump in the pool. 4. Short rallies not selloffs. When markets drop, shorts finally turn a profit and get ready to cover. 5. Don't buy up into a major moving average or sell down into one. See #3. 6. Don't chase momentum if you can't find the exit. Assume the market will reverse the minute you get in. If it's a long way to the door, you're in big trouble. 7. Exhaustion gaps get filled. Breakaway and continuation gaps don't. The old traders' wisdom is a lie. Trade in the direction of gap support whenever you can. 8. Trends test the point of last support/resistance. Enter here even if it hurts. 9. Trade with the TICK not against it. Don't be a hero. Go with the money flow. 10. If you have to look, it isn't there. Forget your college degree and trust your instincts. 11. Sell the second high, buy the second low. After sharp pullbacks, the first test of any high or low always runs into resistance. Look for the break on the third or fourth try. 12. The trend is your friend in the last hour. As volume cranks up at 3:00pm don't expect anyone to change the channel. 13. Avoid the open. They see YOU coming sucker 14. 1-2-3-Drop-Up. Look for downtrends to reverse after a top, two lower highs and a double bottom. 15. Bulls live above the 200 day, bears live below. Sellers eat up rallies below this key moving average line and buyers to come to the rescue above it. 16. Price has memory. What did price do the last time it hit a certain level? Chances are it will do it again. 17. Big volume kills moves. Climax blow-offs take both buyers and sellers out of the market and lead to sideways action. 18. Trends never turn on a dime. Reversals build slowly. The first sharp dip always finds buyers and the first sharp rise always finds sellers. 19. Bottoms take longer to form than tops. Fear acts more quickly than greed and causes stocks to drop from their own weight. 20. Beat the crowd in and out the door. You have to take their money before they take yours, period.
elindydotcom, I appreciate the link and the information, but what I'd really like is for people to post their own personal rules that they use on a daily basis. Thanks, -FastTrader
bloody hell that's a lot of rules! lol. i could never keep all that straight, i can barely handle... 1. if the dow is up "a bunch", short it 2. if the dow is down "a bunch", long it 3. doing size is like smoking: eventually, it will kill you
I break this one everyday. I trade the open fast & furious. Most of my profits are made off the open. Good thing that's not one MY rules -FastTrader
1)make sure first cup of coffee is consumed at least one hour before market open. 2)use restroom within 1/2 hour of open 3)be sure all dogs,cats, and/or children have gone to the bathroom. Happy Trading.
Rule Number 1: Never lose money. Rule Number 2: Never forget Rule Number 1. --Some old walrus from Omaha. Better Rule Number 1: Make money. Better Rule Number 2: Do it with a smile.