|
Don'ts:
1. Don't trade more than you can afford to lose.
Never, ever, start a business underfunded.
2. Don't enter a position without a predetermined exit in case the play turns against you.
A successful trader will not hope that a bad trade will “come back." He will exit and may or may not re-enter when a signal re-appears.
3. Don't exit prematurely if the move is going in your direction.
Just because there is a good profit doesn't mean that the commodity can't go higher. Instead of selling during a good move, consider trailing a stop loss order, or use a violation of a moving average or a trend line as an exit.
4. Don't trade on emotions.
If you do, go ahead - paint the "L" on your forehead.
5. Don't be impatient.
We will say it again, don't be impatient, it will only cost you more commission.
6. Don't enter a trade unless you fully understand and appreciate the risks.
Never, ever!!!
Do's:
1. Do learn as much as possible about trading and trading strategies.
Knowledge is power. You will not have access this until you know the answer to the questions. This takes time, the willingness to learn, money, careful observation, skillful decision making skills, an exceptional business plan and unusual patience. Secular markets going in your direction is a definite plus!
2. Do have a money management plan in place and follow it.
It really isn’t rocket science. Find your comfort zone and stick to it!
3. Have reasonable expectations.
We all hate cliches but - Bulls make money, bears make money – pigs get slaughtered. A good business plan is the answer.
4. Do make your own decisions.
Building confidence by doing everything according to plan will reward you beyond your expectations.
5. Do the risk analysis in each trade and stick to the plan.
6. Be prepared for the worst and plan for the best. Have an alternative plan in place for all contingencies - a good example would be a limit move or re-entry after a loss. Execute without emotion and continue to work the plan.
|
