MY 10 COMMANDMENTS OF TRADING

1. Specialty

Everyone has a different approach to trading. If you enjoy day trading and find yourself performing poorly with swing trades or vice versa, stick to what you enjoy/ works best for you. Flow with the river current; don’t swim against it!

2. FOMO

There are countless days of trading, countless tickers, countless opportunities ahead. If a trigger has past significantly, move on to the next! Why risk capital when you can ensure a better play later on.

3. Trigger

You WILL wait for the trigger! Do not try to enter a trade a few points short of trigger to milk a few extra dollars. 0.10-0.30 per contract will not make a difference once trigger confirms; don’t be a penny pincher!

4. Risk Management

Every successful trade starts with the same principle: risk management. ALWAYS start small and scale into the play upon confirmation. Never put in what you cannot afford to lose 40% of. As your account grows, your positions should not be increasing; the beauty of a larger account is losses will start to affect you less and less if properly sized.

5. Overtrading

You do NOT need to trade an abundance of names every day to be a successful trader. The more names you trade, the greater risk and stress you are taking on. Pick 3 names the day before and stick to those. If opportunity doesn’t present itself, there will always be another day.

6. Volume

Next to price, volume is the most important factor to consider in a trade. Remember volume is relative! Look left to plan right.

7. Earnings

You will NOT play earnings unless you acknowledge it is a complete gamble and are okay with losing 100% (bad idea either way).

8. Small Wins

Do not try to shoot for multi baggers on every trade. This will lead to positions that were profitable to go red if your greed doesn’t take the win, turning a peaceful trade into a nightmare position. Small wins add up over time. If you aim too high, you will always be disappointed.

9. Stop-losses

Honor your predetermined stop-loss! If you were stopped out of a trade, you have completed a successful trade. Do not bag-hold with hope. We are traders not gamblers.

10. Emotions

Failure to comply with the commandments above will leave a doorway open for emotion to enter your trade. Emotions exacerbate losses, leading to more stress and trickling into the famous “I need to make my money back!” Focus on learning throughout the process and the losses will recoup themselves before you realize it.