Key swing trading & day trading rules
for profitable stock market trading systems
Looking for advice
about how to invest in stock ?
Stock trading or active investing should be based on every day trading rules. These rules help to maintain discipline that is one of most important aspects of stock trading and investing. Rule based stock trading system is key factor for profitable results of electronic stock trading activities.All these investing, swing or day trading rules should be placed into stock trading business plan that cover all aspects of trading or investing activities.
What are good sources
of every day day trading rules ?
There are several options how to obtain new every day trading rules for your
stock trading plan.
First one is to develop your stock trading rules based on stock trading education. There are several ways how to learn how to invest in stocks or how to trade stocks online. Books, DVDs, online video, seminars, mentoring, just to name few of them.
Stock trading strategy testing
provides important every day trading lessons
Stock trading education will allow to create first versions of stock trading plan. As trader makes next steps he learns more. These steps start with creation of several
stock trading strategies
that fit with his/her stock trading plan and system. These strategies should be properly tested using some
paper trading.
This
virtual stock trading
also provide a lot of helpful swing or day trading lessons. These lesson could lead to discovery of new day trading rules that could be placed into stock trading plan.
Great traders are good source
of every day trading lessons
There are plenty of traders in the world that make money. There is not possible to find them all and also a lot of them do not provide any public lectures, presentations or so. But sometimes it is possible to find an interview with these successful traders that run hedge funds or manage their own money. Some interviews are published in a books, too. These interviews are very good source of hidden knowledge. When these traders speak it is worth listening to them.
Every day trading rules
for stock market trading systems
I have read several interviews with great traders. These interviews I found in really
good books from Jack Schwager.
Another interviews are available on the Internet from time to time. Here are some rules that could be part of stock market trading systems of every good trader. "Do not add to a losing position. Never, never, never."
This is very important rule that should be part of money management rules. Breaking of this rule lead to ruin. "Capital comes in two varieties: Mental and that which is in your pocket or account. Of the two types of capital, the mental is the more important and expensive of the two. Holding to losing positions costs measurable sums of actual capital, but it costs immeasurable sums of mental capital."
This is taken from Denis Gartman, well known asset manager and I must admit that it is big truth in this one. Every trader should protect his/her own capital. But not only money, mental part is important too. "Stick with your winners and cut your losses quickly"
This is rule that can be found in every interview. Cutting losses using proper
stop loss techniques
is critical for profitable trading. You can be "right" only 30% of the time and still make a lot of money. But you must have small losses and large profits. "Market are driven by human psychology and emotions"
It is absolutely critical to understand that other traders and investors are only humans. They make their own analysis and decisions. And they make errors, too. It could be more important to understand investors psychology then to understand economics.
It is possible to find much
more trading rules
and it pays to be open to such good ideas. Good traders learn all the way during their trading career.
The Jack Schwager's book is good source of similar ideas and insights. Market Wizards: Interviews with Top Traders
Author: Jack D. Schwager |
| | I recommend this book very much. | You can find details about this book and order it from
Amazon bookstore.
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