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The 7 Essential Trading Rules

  
  Education
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1)      Begin each trade with the end in mind (have a game plan)

 2)      Always maintain a “P.M.A.” (Positive Mental Attitude)  

3)      Avoid falling in love with investments and positions

 4)      Only invest when you have an “EDGE” 

5)      The market does not know your position or how much you are up or down

 6)      Manage Your Risk: H + W + P = E

(Hoping + Wishing + Praying = Exit the Trade)

 7)      Play the game “One Trade at a Time” 

(The most important investment is the one you have right now – not the one you had in the past or the one you want to do in the future)

Trading Mistakes

  
  Education
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Letting small losses turn into large losses.
— Refusing to take a loss at all.
— Overbetting.
— Bottom fishing/Catching falling knives.
— Averaging down.
— Shorting bulls and buying bears.
— Confusing the company with its stock.
— Falling in love with a “story.”
— Following the leader.
— Buying IPOs.
— Finding the Holy Grail.
— Overtrading.
— Excessive tape watching.
— Being undercapitalized.
— Letting the tax tail wag the stock dog.
— Relying on Blue Channels and Website Analysts
— Thinking this market stuff is easy.
— Thinking rather than looking.

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