To be a successful trader or at least semi successful, you should never do the following : 1) buy pre market 2) buy after hours 3) buy the open 4) buy gap ups 5) chasing a fast moving stock 6) panic 7) revenge trading 8) Over trading There are times when buying the open will render a great trade to where you will make 5-10 points before 10:00 am. That said, its few and far between and its a bad habit to get into. I like to wait at least 5-15 minutes if I need to buy near the open so the smoke can clear. I lost countless amounts of money from buying gap ups at the open only to watch profit takers dump the stock indiscriminately. This is after looking at the charts and determining there was an actual set up despite a gap up. Far too many times I have let adrenaline supercede disipline and patience only to watch my position drop like a rock. The open will also render the most intense losses and it can be hard to get out with a minimal loss. If I get into a position at 9:40 rather than 9:30 and need to get out quickly, its much easier to do at that point than near the open. Im not saying these rules are bullet proof because they are not, intuition is an “ x factor” that cannot be taught but I will tell you, if you follow these rules in conjunction with your research, your chances of being successsful will be increaesed quite a bit. Also, never panic and sell too early. That being said, not buying the open usually avoids this and a pull back can easily be dealt with rationally. You also do t want to over trade. If you make a nice profit, there is nothing wrong with walking away. Why give back a profit? One final note, its usually best to pre determine where you want to establish a position and let the stock come to you opposed to chasing it and getting in too late to where more upside is minimal. Also have an exit stradegy. You know where you want to buy but where are you selling it and when ? On a “ final final note”, Never “ bet the farm” on a stock with the hopes of recouping a bad trading day with that one shot in the dark gamble.. Revenge trading causes more intense losses. Its what all gamblers do, they want that one big trade just to break even. It never works.. Go home, get a good nights rest, forget about it, and prepare yourself for the following days trading.
You should "Never say Never" If you are trading gamma (mainly long)1 and 2 have no bearing.. 3 and 4 are easy to backtest.. No comment on 5 as I am mercifully not forced into short gamma trades any more. 6 is a layup I personally trade better when revenge trading,which probably speaks more that I need to step up my game.. If you have positive expectancy,is overtrading so bad?? Is it considered overtrading?
at any moment as long as market moves, there are winners and losers. There are no moments which are easier to make money, if there are who would be losers?
Successful traders follow their own rules and don't have the need to tell someone else what rules to follow.
Another idiotic thread from someone who most likely has been trading less than 18 months and doesn’t make money. BTW- Your “never do” rules 1-5 are what pretty much every successful trader takes part in.
LOL,. So guess I violate all Your rules. What to do or not to do depends on back testing and timeframe. Some models traded seek out when others are panic or revenge trading, trading against retail. I applaud you have found what works for you and share, but some traders I know only seek out all 8 your post suggests not to do. Like if one's method not producing enough loses, they might be under trading, after/before market news might come out and models seek trend or counter trend and liquidating on next time segment. I have learned just cause I can't make profits in one area of trading, someone else probably is.
Im confident my post will not only help many traders on this board, it will also help some of those that responded to my post.