12 November 2007

Trading rules

1. All successful traders use methods that suit their personality; You are neither Waren Buffett nor Jesse Livermore; Don't think you can trade like them.

2. What the market does is beyond your control; Your reaction to the market, however, is not.

3. To be a winner, you have to be willing to take a loss

4. HOPE is not a word in the winning Trader's vocabulary

5. When you are on a losing streak, reduce your position size

6. Don't underestimate the time it takes to succeed as a trader -- it takes 10 years to become very good at anything

7. Trading is a vocation -- not a hobby

8. Have a business/trading plan

9. Identify your greatest weaknesses, Be honest about them -- and DEAL with it

10. There are times when the best thing to do is nothing; Learn to recognize these times

11. Being a great trader is a process. It's a race with no finish line.

12. Other people's opinions are meaningles to you. Make your own trading decisions

13. Analyze your past trades. Study what happened to the stocks after you closed the position. COnsider your P&L game tapes and go over them the way Vince Lombardi reviewed past Superbowls

14. Excessive leverage can knock you out of the game permanently

15. The Best traders continue to learn -- and adapt to changing conditions

16. Don't just stand there and let the truck roll over you

17. Being wrong is acceptable -- staying wrong is unforgivable

18. Contain your losses

19. Good traders manage the downside; They don't worry about the upside

20. Wall street research reports are biased

21. Knowing when to get out of a position is as important as when to get in

22. To excel, you have to put in hard work

23. Discipline, Discipline, Discipline !

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