Rule #7
If you are doing random trades then you will have random profits. Don’t trade just to trade.
Rule # 6
When faced with a lost, take it and forget about it. Determine what caused the lost and now you have a lesson. If you fail to learn, you are doomed.
Rule #5
If trading a system determine what would be acceptable slippage. Once alerts are triggered, send your order in with the slippage included. In normal system environments you will get filled at your alert. If you are forced to pay up then that could mean there is an imbalance in supply.
Rule # 4
Don’t follow other peoples trades unless your own system is saying that the trade is correct. It is not possible to know all the motives people have.
Rule #3
Winners must be larger than losers, or else you risk a massive loss if you just slip up once. Having large winner goals insures that you can experience a draw down.
Rule # 2
Determine the exit plan before a trade is put on. Once decided have the discipline to follow it.
Wave principle at work on CHBT 5 min chart. Notice the steep correction that occurs after the spike in volume. The correction lasted until the 4th wave is hit. Text book waves at work.
Rule #1
Figure out ahead of time if there is enough liquidity on the instrument traded to get in and out with the lowest slippage possible. No liquidity is what can cause crashes to accelerate faster as sellers needing to get out, keep pushing prices lower seeking bidders, but there is none.
