The Ten Commandments of Trading

As I have mentioned in my previous article, trading psychology plays an important factor to a trader. It can attribute sometimes as much as 50% to the success of a trader. These are ten factors that I should always bear in our trading journey.

1. Discipline. Never allow emotion to rule and monitor your position on a daily basis.A discipline trader is a more successful trader.

2. Protect Principal

3. Protect Profits. Always lock-in your profit , let your profits run and cut your losses short. it always difficult to recover lost money than to make a gain.It is more difficult to recover from loss than to make a gain

4. Money Management is more important than entry strategies

Invest no more than 5% – 10% of your investment capital one position in order to reduce your your risk exposure and maximise your potential profit.

5. Always use STOPS as it will protect you and lock in your profits

6. Trade in the direction of the trend. Remember that the market is always the king and much bigger than you. Do not fight the trend , the trend is your friend.

7. Shares NOT to consider buying

(a) ILLIQUID – shares with low trading volume.
(b) In a “CRAB MARKET” trend.

8. When to Sell-When the fundamental starts to fail and your trading system sell triggers are reached.

9. Make and be responsible for your own decisions

No two traders are the same. What is good for one is not necessarily good for another. Test your trading system and stick to it if it work.

10. Discipline

- Repeated, because discipline is the most important commandment for profitable share trading. Apply the system, attend courses and you hopefully we can become a better trader.