Tell me the rules of Trading....

Discussion in 'Psychology' started by ultranet, Oct 26, 2006.

  1. Beautiful. There have been other good posts in this thread, but this one is succinct and universal.
    #31     Oct 27, 2006
  2. The only rule trade within yourself.
    Sorta like Socrates Know thy self.
    Me I will only risk 3% or less capital per position.
    I won't enter a trade unless my reward/risk ratio is at least 2.
    The trend is the only ally you got.
    If I don't feel like I'm in a trading zone, I'll go fishing. I have never lost a trade while fishing.
    #32     Oct 29, 2006
  3. Rule # 1 : Do not lose money

    Rule # 2 : Do not forget rule number one.
    #33     Nov 23, 2006
  4. The Dokkodo "The Way to Be Followed Alone") was a work written by Miyamoto Musashi a week before he died in 1645. It is a short work, consisting of either 19 or 21 precepts; It was largely composed on the occasion of Musashi giving away his possessions in preparation for death, and was dedicated to his favorite disciple. It expresses a stringent honest and ascetic view of life.

    The precepts
    1. "Accept everything just the way it is."
    2. "Do not seek pleasure for its own sake."
    3. "Do not, under any circumstances, depend on a partial feeling."
    4. "Think lightly of yourself and deeply of the world."
    5. "Be detached from desire your whole life long."
    6. "Do not regret what you have done."
    7. "Never be jealous."
    8. "Never let yourself be saddened by a separation."
    9. "Resentment and complaint are appropriate neither for oneself or others."
    10. "Do not let yourself be guided by the feeling of lust or love."
    11. "In all things have no preferences."
    12. "Be indifferent to where you live."
    13. "Do not pursue the taste of good food."
    14. "Do no hold on to possessions you no longer need."
    15. "Do not act following customary beliefs."
    16. "Do not collect weapons or practice with weapons beyond what is useful."
    17. "Do not fear death."
    18. "Do not seek to possess either goods or fiefs for your old age."
    19. "Respect Buddha and the gods without counting on their help." (Novelist Eiji Yoshikawa, in his novel Musashi, claims that this precept originated during Musashi's third duel against the Yoshioka clan, in which he found himself praying to a shrine's god to protect him when he launched his ambush, and violently breaking it off when he realized he shouldn't be praying.)
    20. "You may abandon your own body but you must preserve your honour."
    21. "Never stray from the Way."

    I just wanted to share this. There is much good advice here. I like 1, 3, 6, 15, 16, 17 and 19. As to 19 I have found myself praying on occasions when in a trade. :D
    #34     Nov 23, 2006
  5. I'd like to add

    3) Protect your profits

    One of my biggest loss days came when I thought I was just risking profits. Dont get reckless and 'play' with house money.
    #35     Nov 23, 2006
  6. mokwit


    First two are very well worn but guess what, they are actually true - hence repeated again here.

    1) You have to have an 'edge' - if you don't know what your edge is then you don't have one.

    2) there's a putz [fool] in every game, if you don't know who it is then it's you - you are the putz

    3) Buy the queit times and sell the wild times.

    4) Your business is with the tape (livermore).

    5, 6, and 7 are applicable to trading even if some don't think so.

    5) Any informtion that finds its way as far as us retail traders is probably disinformation.

    6) Water and money find their own level. Business will do whatever it can get away with.

    7)If something is open to abuse for financial gain it will be abused.

    8) In poker [apparently] the best amateurs read their opponents, the pros read the odds.

    9) The mathematics have to be on your side

    10) All's fair in love and war [and in traded markets]
    #36     Nov 23, 2006
  7. mokwit


    We can all be gentlemen when there are more troughs than pigs

    Not normally this cynical, but have been playing manipulated stocks.
    #37     Nov 23, 2006
  8. There are no rules.....for every cliche trading rule....their is a contra trading rule.....i.e.,,,,,poker books and gus hanson.....or thegolden rule: treat others as you would like to be treated.......versus.........he who has the gold makes the rules......the only thing that matters is being successful.....and even this statement is total about what wallstreet does......either sell pitchforks to the gold miners.....or trade off of inside information.....or do what goldman sachs does........consult on investment banking deals....have about 5 ex-sachs guys running treasury, new jersey, nyse, etc.....or just manipulate markets by having your analyst say bidu should be a 27.00 stock right when you want your short position to get bailed out!!!!!
    #38     Nov 23, 2006
  9. To be patient and vigilant when you have to be and to be greedy and enthusiastic when you have to be - often at moments that you least expect or naturally feel like.

    Example - You've been waiting for a settup for most of the day and yesterday you didn't trade at all.

    Then you spend half an hour slowly working up an appetite to put on a trade, when everything lines up just right. And then, just when your about to put on the trade, the very last one minute bar gives you a "no go" type signal not in a big way, but it is there. You must be disciplined to follow it, not easy in some personal circumstances, especially if you missed that big move on Friday.

    Then you might have to wait another ten minutes to feel vindicated for not getting in. In those ten minutes there are many reasons to get in - and one false move and the trade is a looser. After that, same process again. 15 minutes later a very similar signal pops up (before it took 30 minutes to form) and then again, that very next one minute(or tick) bar gives that same "no go". Next bar, same again as before.The next bar though is a breakout bar - not a big one - but enough to signal that everything is a go. Put on a trade at this point - it is very difficult to do.
    #39     Nov 23, 2006
  10. me1969


    Don't think about winning or losing. It is all about performance. Trade risk. And be always a beginner - self-disciplined and detached in your training.
    #40     Nov 23, 2006