One of the greatest assets for new traders is the wisdom of successful ones. Sadly, looking for “quick hacks”, many forgo such wise advices from reliable sources. And needless to say, they struggle with countless trial and fails in their trading journey, eventually ending with marginal to no returns.
Are you one of them?
Want to make more money from your investments in stock market?
Here’s a simple solution to turn that wish into reality: Learn from leaders.
To help you begin with, here are 5 original trading rules from successful trader to implement in your own strategy:
Keep Your Trading Capital Safe
“The most important rule of trading is to play great defense, not great offense.” – Paul Tudor Jones
Whoever said offence is a great defense didn’t factor the case of trading. In the stock market, you must always work to protect your trading capital – even when you can afford to lose it. If not, if you’re making unnecessary moves that risk you capital, you’re actually treating trading as a gamble. And it is possibly the biggest mistake you can make that would wreck all your dream of a high-rewarding portfolio.
Sit Back and Have a Great Deal of Patience
“Money is made by sitting, not trading.”– Jesse Livermore
The relevance of patience cannot be stressed more in trading. It’s the biggest asset of successful traders. When you rush to make profit in every trade, you would likely encounter many losses. Not every bullish and bearish market will bring you big opportunities. So you must sit back, keep the temptation away from trading and have a great deal of patience. And when we say “sit back”, we mean analyze the market and keep on learning.
Keep Yourself Emotionally Stable and Healthy
“Mental capital is just as important as financial capital. Protect both.” – Adam Grimes
It’s easier to lose your head when things aren’t going according to plans and you’re losing quite a lot of money in the market. But it is in these times, successful traders are made. How they act, how they respond, how they bounce back from such losses – all these shape their fate. So you must avoid letting your emotions sway your decision-making ability. Protect your mental capital.
Take Yourself Out of Bad Traders
“The single most important thing you can do all day is to talk yourself out of bad trades.” – AI Brooks
It is okay, things will improve – many people think, even when knowing they chose the wrong trade. Sadly, their hopefulness ends up in great financial disaster. If you have a made a wrong trading decision, it is important that – like mentioned above, stop acting emotionally – and talk yourself out of that trade. Admittedly, it is going be difficult, more so if that company is close to your heart. But don’t let cognitive biases get the best of you. Be strong, identify bad trades, and get out of that place.
You Can’t be a Perfect Trader and it’s Okay
“In this business if you’re good, you’re right six times out of ten. You’re never going to be right nine times out of ten.” – Peter Lynch
Even when you have done your homework, read countless trading books and are experienced, you can’t be a perfect trader. Meaning to say, even your fool – proof strategies will fail and you’re going to have to deal with that effectively. You must learn to take losses and act responsibly. Don’t strive to be perfect – strive to be better than you were yesterday.
These are 5 simple trading rules from top and highly successful traders. Follow their path and see your fortune turn. It won’t happen overnight – but you will see the difference in the following weeks and months.