One of the crucial points in trading is having rules and sticking to that rules. No matter how simple mistakes we do, we tent to repeat them very often. Therefore trader should build rules from his mistakes to degrease loses and increase profits. Here are my rules:
1. Don’t open trade without analyzing the market
We tend to shape opinion from first look. No matter how certain you are in your opinion you should do analyze. It’s better to combine technical with fundamentals and have at least two reasons for opening a position. 2. Don’t take tips
People tend make tips, to help or to prove their competence. But very often this tips of one trader leads to failure of another. That is because of different perspectives and trading style of traders. 3. Don’t risk more than 20% of your Equity.
We tend to wish for more, which makes us risk a lot. New traders use big portion of their equity in one trade hoping to have more gain. But this also decreases your chance for recovering in case trade goes wrong. 4. Take your losses don’t hope for reversal. Use stop loss.
People don’t want to take losses no matter how small it is. Traders hope for better and wait for reversals which sometime…