Treat trading as a business. Like every business have a set of rules to achieve success. Successful companies are on top because they follow the rules; the same applies to the trading business.
In today's post will discuss Rules for successful trading. That will help you in your trading.
Trade as per your plan
The trading plan is like a guide. It tells you what to do in every situation. It helps you in knowing the Entry, Exit, and money management rules for every trade.
Before creating the trading plan, you must back test it, which is accessible in today's modern world of technology. Once you created and back tested the method, write it, and follow it.
Trade with Trend
Now here comes my favourite trading rule. Following the Trend of the time frame, you are trading will increase the probability of winning. Remember safe and more money can be earned by following the Trend.
Define your Risk-Taking Limit
The capital protection should be your primary goal. To achieve this, set the limit of the amount in the percentage you can afford to lose per trade.
Like most traders set this limit, varying from 1% to 3%. After deciding the percentage of the amount, only trade the quantity that matches the portion of your risk-taking the limit.
Trade-In Active Instruments
Try to trade in instruments that have good volumes. As in-active instruments, most of the time, trade-in narrow range.
And making the position in those instruments can make you frustrated. So it's better to look for active stocks or commodities, etc.
Know When To Stop Trading
Avoid trading for a few days when you had some perfect money or when you are experiencing higher losing trades. Taking the break will help you in re-assessing the things in a better way.
Cut the losers
Don't increase or add more positions in losing trades. It is the crucial rule to follow. Most traders make this mistake, hoping to wind up the trade on the rise. But they end up on the losing side, even they lose more than before.
Learn the lesson from losses
Your losing trades can become your best teacher. The failures in life teach more than the winning one; having the proper record of trades, you can check the past mistakes you made in the losing trades.
Trade for Profits, not for Ego
Now you may find this rule bit wired. But it's the saddest truth most the traders only want to trade for ego; they want to show others they are always right.
Just remember if you are already making money and achieving consistent results. You are already right most of the time.
Always be the student
Keep leaning on the regular basis will increase your winning chances. The more you will gain knowledge, the more you can make profits later. The most of the traders stand dependent on the tips of so-called television or social media experts.
Always remember you can only make a better decision or judgment of your trade. Don't change or make your judgment because of others. It's best to learn and upgrade your trading knowledge from time to time.