The 10 Commandments of Trading

1. Stops are the key to success for many traders… limit your loses. Before entering a trade focus on how much you can lose not how much you can make. If you protect yourself you will be surprised by how far your profits run.

2. We do not buy gap ups and we do not sell gaps down. Yes there are exceptions to every rule but we are interested in the highest probability.

3. Remember all markets function in the same manner and the one driving factor is that human nature which dictates price movement based on panic, fear, greed, insecurity, anxiety, stress and uncertainty. Think with the opposite side of your brain. Nothing is new in stocks. The game does not change and neither does human nature.

4. Mark to market everyday which is how a professional watches his or her money. Know your capital every single day and understand the amount of money in your account.

5. Do not let the minute-to-minute or day-to-day swings change your conviction of where the market is going. Stick and stay to make it pay.

6. Of all speculative blunders, there are few greater than selling what shows a profit and keeping what shows a loss. Sell your losers keep your winners it’s that simple.


7. Be advised that it is better to be more interested in the market’s reaction to new information than to be the piece of news itself. People who buy headlines eventually end up selling newspapers.

8. Keep record of your trading results

9. Take a trading break. A break will give you a detached view of the market and a fresh look at yourself and the way you want to trade for the next several weeks.

10. The deepest secret for the trader is to subordinate his will to the will of the market. The market is truth as it reflects all forces that bear upon it. As long as he recognizes this, he is safe. When he ignores it, he is lost.