Five Successful Trading Rules

2023-09-20
Summary:

Summarized five key trading rules to help novice traders transition from a state of frequent losses to a state of continuous profitability.

In the trading world, success is not accidental but built on a solid foundation of rules. The following five trading rules will help you transform from a novice who often bursts into a successful trader who can continue to make profits. If you are eager to profit from trading, then it is important to be proficient in these five trading rules.

Five Successful Trading Rules

Rule 1: Don't fall in love with a trading list

This rule is divided into three main points. Firstly, don't be infatuated with a single transaction; don't persist in watching a single transaction. For example, when you go long at a certain price point and set a stop-loss point, but the price starts to fall, you keep adjusting the stop-loss point, hoping that the price will rebound. The market will not act according to your expectations, so don't frequently adjust stop-loss points; be patient and wait.

Secondly, don't be too enthusiastic about your analysis. If the market trend changes, do not stick to the original analysis and adjust trading strategies flexibly. Don't blindly pursue long positions. When the trend clearly declines, you should consider short positions.

Finally, do not become overly obsessed with a specific market. If you have been trading the same variety but it has entered a sideways stage and there are more trading opportunities in other markets, do not hesitate to switch varieties. The market is not your partner; always look for markets with high volatility and opportunities for trading.


Rule 2: Establish your own trading system

Unplanned transactions are destined to fail. Just like building a house, you need a blueprint to guide you. It is necessary to establish your own trading system, which can help you systematically execute transactions.

The trading system includes four key elements:

  1. Trading plan: Determine all trading-related plans, such as trading cycle, time period, and variety.

  2. Risk control: Clarify loss tolerance, position size, and profit loss ratio. Transactions that do not meet risk management requirements should not be conducted.

  3. Trading strategy: Ensure that your strategy is profitable. Check the effectiveness of the strategy before each transaction.

  4. Transaction log: Record each transaction, analyze errors, and continuously improve.


Rule 3: Treat failure as a learning opportunity

Losses are not scary; what's scary is not learning from losses. Every loss is a valuable learning opportunity that brings you closer to success. Don't worry too much about losses; see the value in them. Just like running a business, there are operating costs, and losses in transactions are also a cost.


Rule 4: Do not violate trading rules

Discipline is the key to successful trading. Strictly adhering to the rules, strategies, and risk management principles set by oneself will help you achieve more profits. Self-disciplined traders are more likely to succeed. Don't let emotions influence your decisions.


Rule 5: Continuous Progress

Traders must constantly learn and improve. Don't expect to become a moneymaker overnight; it takes time and effort. Making a little progress every day and reducing mistakes will make you better. Successful trading is not just about profitability but also about being able to continuously improve and reduce errors.

Successful trading is not a fluke but rather based on clear rules and continuous progress. The rules mentioned above are the key to becoming a successful trader. Don't give up, because a successful transaction will bring more freedom and opportunities.


Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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