MUST TO FOLLOW DOs & DON’Ts for Success in Trading

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  1. Plan the trade and trade the plan.
  2. Put the STOP LOSS in the system and not in your mind (OR) Hedge your trade.
  3. Before entering into trade ask yourself whether you are TRADING or GAMBLING?
  4. You must know your ENTRY, STOP LOSS and TARGET points before entering into any trade.
  5. Never chase the price, you will always be able to find another good opportunity.
  6. Never force yourself into trade; be patient, it is okay to sit on the cash rather than forcing yourself into wrong trade.
  7. Never overtrade, and be a discipline trader.
  8. Leverage is a double edged weapon, use it for your advantage and not for blowing off your trading capital.
  9. Never execute your emotions, execute your trading plan.
  10. Do not hesitate to take losses when your trade goes in other way.
  11. Never let the profit making trade to go into losses.
  12. Bring stop loss forward as soon as your trade get into decent profits.
  13. Use trailing stop loss when you want to ride the trend.
  14. Use the Money Management Rules.
  15. Never break the rules that you have set for yourself and for your trading success.
  16. Forget the news, remember the chart. You’re not smart enough to know how news will affect price. The chart already knows the news is coming.
  17. Buy at support, sell at resistance. Everyone sees the same thing and they’re all just waiting to jump in the pool.
  18. Don’t chase momentum if you can’t find the exit. Assume the market will reverse the minute you get in. If it’s a long way to the door, you’re in big trouble.
  19. Trends test the point of last support/resistance. Enter here even if it hurts.
  20. Trade with the TREND not against it. Don’t be a hero. Go with the money flow.
  22. Avoid the open. Give at least a 15 mins for the market to find its own direction before you enter into trade.
  23. Don’t take any Intra day trades after 2.30 pm.
  24. Never carry intraday trade to next day.
  25. Bulls live above the 200 day, bears live below. Sellers eat up rallies below this key moving average line and buyers to come to the rescue above it.
  26. Price has memory. What did price do the last time it hit a certain level? Chances are it will do it again.
  27. Trends never turn on a dime. Reversals build slowly. The first sharp dip always finds buyers and the first sharp rise always finds sellers.
  28. Bottoms take longer to form than tops. Greed acts more quickly than fear and causes stocks to drop from their own weight.
  29. Beat the crowd in and out the door. You have to take their money before they take yours, period.
  30. Don’t trust others opinions – It’s your money at stake, not theirs. Do your own analysis, regardless of the information source.
  31. Don’t break your rules – You made them for tough situations, just like the one you’re probably in right now.
  32. Don’t try to get even – Trading is never a game of catch-up. Every position must stand on its merits. Take your loss with composure, and take the next trade with absolute discipline.
  33. Don’t believe in a company – Trading is not investment. Remember the charts and forget the press releases.
  34. Don’t seek the Holy Grail – There is no secret trading formula, other than solid risk management. So stop looking for it.
  35. Don’t forget your discipline – Learning the basics is easy. Most traders fail due to a lack of discipline, not a lack of knowledge.
  36. Don’t trade over your head – Concentrate on playing the game well, and don’t worry about making money.
  37. Don’t chase the crowd – Listen to the beat of your own drummer. By the time the crowd acts, you’re probably too late…or too early.
  38. Don’t ignore the warning signs – Big losses rarely come without warning. Don’t wait for a lifeboat to abandon a sinking ship.
  39. Don’t join a group – Trading is not a team sport. Avoid acting on messages, flashes and financial TV. Your judgment may be more correct than all of them put together.
  40. Don’t have a pay check mentality – You don’t deserve anything for all of your hard work. The market only pays off when you’re right, and when your timing is really, really good.
  41. Don’t ignore your intuition – Respect the little voice that tells you what to do, and what to avoid. That’s the voice of the winner trying to get into your thick head.
  42. Don’t hate losing – Expect to win and lose with great regularity. Expect the losing to teach you more about winning, than the winning itself.
  43. Don’t fall into the complexity trap – A well-trained eye is more effective than a stack of indicators. Some time Common sense is more valuable than a complex set of indications.
  44. Don’t confuse execution with opportunity – Overpriced software won’t help you trade like a pro. Pretty colors and flashing lights make you a faster trader, not a better one.
  45. Don’t project your personal life – Trade with the capital that you can afford to lose.
  46. Trading is a serious BUSINESS, Don’t think its entertainment – Trading should be boring most of the time, just like the real job you have right now.
  47. Never risk more than 2 to 5% of your trading capital in one trade.
  48. Never trade with HOPE, GREED and FEAR. These are killers in Trading profession.
  49. Just because you entered into wrong trade market or God will not listen to your prayers or hopes.
  50. Don’t expect market to listen to you; instead you listen to the market.
  51. Make sure your TRADING COSTS are less. Never pay high BROKERAGE.
  52. Choose your BROKER (multiple brokers) based on your trading style.
  53. Cut the losses immediately and let the profits run.
  54. Thrill seekers usually lose.  Be a planned and disciplined trader.
  55. Don’t trade on rumours. It’s a gambling.
  56. Never add to a losing position. Stay out of trouble, your first loss is your smallest loss.
  57. Analyze your losses. Learn from your losses. They’re expensive lessons; you paid for them. Most traders don’t learn from their mistakes because they don’t like to think about them.
  58. If you’re just getting into the markets, be a small trader for at least a year, then analyze your good trades and your bad ones. You can really learn more from your bad ones.
  59. Always record your trades in tracking sheet and review your trades periodically (at least once in a month).

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