In my Facebook trading group, I asked the question: “What is your most important trading rule?” As usual, I got a ton of great answers. The most common response was: “Always follow your trading plan.” followed by “cutting losses”, and “keeping losses small.” This should hit home for new traders. If you do not have a trading plan, it is crucial that you learn what one is, and build your own. The key to your trading success is not going to be entering winning trades, but how you exit your losing trades.
Here are 16 of the trading rules that members said were most important to their own trading success.
“Always use stop losses.” – Wenzhan BT
“Never deviate from your trading model.” – Richard Weissman
“Trading with discipline.” – Oscar Castanon
“Mine is to never lose more than 1% of my total trading capital in any one trade. That keeps my capital safe.” – Steve Burns
“Never, under any circumstance add to a losing position… ever! Nothing more need be said; to do otherwise will eventually and absolutely lead to ruin!” – Dennis Gartman
“Follow the system and block all outside noise.” – Dan de Joya
“Wait for the best entry.” – Jay Chandran
“Trust the math.” – Alan Lattanner
“1% risk exposure per trade. A max of 5 trades on at once.The less trades on,the better. I always find that if you have one great winner,its best just to add to that winner or do nothing. I used to want to enter every trade that gave me a great signal but often other trades just offset your one great trade.” – Jörg Brand
“Trading with patience” – Zou Yi Hui
“Never double down into a losing trade, cut losses early. Never buy into earnings, you might as well take your money to the casino. Never listen to pump and dump stock enewsletters, trade on price action and volume. For new traders never trade on Margin no matter what use your own funds only. Much like credit card shopping it is a recipe for disaster. Deviation from trading rules WILL, not MAY result in tuition paid to the market.” – Ray Mendoza
( Trend Following ) –> “Accepting the fact that more than 60% of trades are losers and cut the losses immediately if it goes against planned direction.” – Guruprasad Venkatakrishnan
“Following your trading plan, No matter what.” – Anand Bang
“First rule of the MARKET Protect your capital…………… 2nd rule of the MARKET TRY to make money………….” – UeSushilkumar Jagtap
“Never dwell on what might have been”…One of my pet peeves is listening to people who say things like “If I had only held on”… I could care less what happens to a stock after I sell it.” –Doug Gregory @sharptraders
“To make money.” – Chris E
“Trading success is not going to be entering winning trades, but how you exit your losing trades.”