Rules for Stock Exchange Success From Richard Rhode
1. The first rule has to do with how you act in a bull market. For the most part, traders are holding on to long positions in this type of market. In a bull market, one can only be long or on the sidelines.
2. The second rule goes: buy that which is showing strength and sell that which is showing weakness. The public continues to buy when prices have fallen. The professional buys because prices have rallied. The rule of survival is not to “buy low, sell high,” but “to buy on time and to sell on time or to not take a position at all.”
3.Stick to a plan thought out in advance and be sure about your actions. Before entering the market, calculate all of the consequences and actions that may be required. You also must have a backup plan if the situation does not evolve the way you expected. There is no 100% guarantee in the market.
4. On minor corrections against the major trend, add to trades. In bull markets, add to the trade on minor corrections back into support levels. In bear markets, add on corrections into resistance. Use the 38.2-50% corrections level of the previous movement or the proper moving average as a first point in which to add.
5. Be patient. Taking small profits is the surest way to ultimate loss I can think of, for small profits are never allowed to develop into enormous profits. The real money in trading is made from the three to five large trades that develop each year. You must develop the ability to patiently stay with winning trades to allow them to develop into that sort of trade.
6. Be impatient. As always, small loses and quick losses are the best losses. It is not the loss of money that is important. Rather, it is the mental capital that is used up when you sit with a losing trade that is important.
7. Teach yourself to hit the most vulnerable points. If you have found a weak spot, concentrate your actions in that direction. Identify a profitable position and distinguish it from a loss-making one. This is what you need to learn in the first place.
8. Never, ever under any condition, add to a losing trade, i.e. never water down a position. If you are buying, then each new buy price must be higher than the previous buy price. If you are selling, then each new selling price must be lower.
9. When sharp losses in equity are experienced, take time off. The urge “to get the money back” is extreme, and should not be given in to.
10. Don’t trade when technical and fundamental factors contradict each other. Wait until they show the same thing. When the signal factors are moving in tandem, you get much more confidence that your decision is correct.
11. When a peak of the market is taking shape, this is the result of violence, but when a bottom is taking shape, this is the result of a smooth flow.
12. When adding to a trade, add only 1/3 to 1/2 as much as currently held. That is, if you are holding 60 lots, at the next point at which to add, add no more than 25 or 30 lots. That will allow you to sit through 50% corrections.
13. The final 10% of the time of a bull run will usually encompass the majority of the price movement. Thus, the first 50-70% of the price movement will take 90% of the time.Use the Forex trading rules and avoid complex methodologies concerning obscure technical systems. The simpler your trading methodologies, the better your trading.
Торговец, действующий по собственной инициативе и стремящийся извлечь прибыль непосредственно из процесса торговли. Обычно подразумевается торговля ценными бумагами (акциями, облигациями, фьючерсами, опционами) на фондовой бирже. Трейдерами также называют торговцев на валютном (форекс) и товарном рынках (например, «зернотрейдер»). Торговля осуществляется трейдером как на биржевом, так и на внебиржевом рынках.