Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

inthemoneystocks

Three Rules Every Stock Trader Should Follow

Recommended Posts

One of the number one reasons that traders lose money is because they cannot follow the most important rules. In fact, some novice traders do not even have any rules in place when trading. They are simply relying on luck or tips to make money in stocks. Here are three rules that every stock trader should adopt if they want to have a chance in this market.

 

1. The 10 Percent Rule. The ten percent rule was made famous by the legendary trader Jesse Livermore. He said that he would never take more than a 10 percent loss on any stock. Whenever he broke this rule and let his emotions get the best of him he really suffered a bigger than expected loss both financially and mentally. A ten percent loss keeps you in the game and allows you to fight another day. I cannot begin to tell you how many times I have seen one trade turn into a huge loss. This giant loss often hurts the trader involved and has even been the cause of many blown up accounts.

 

2. Do Not Trade With Capital You Cannot Afford To Lose. There is an old saying, scared money never makes any money. Whenever traders and investors trade with capital they cannot afford to lose it hinders their thinking. Trading comes with enough pressure already, but betting the rent or the mortgage on a stock simply affects the traders ability to read or follow that stock's price movement correctly. A good rule is to also apply the 10 percent rule to position size. Never put more than 10 percent of your account into any one stock position. This will allow you to find other trading opportunities should they arrive. All of your capital will not be tied up in one stock. By keeping the position size to just 10 percent of your account you will not have too much of an emotional connection to any one trade. Keeping the stress of trading down is extremely important for your health.

 

3. Learn To Use And Read Charts. While most of the people in the world will use fundamental analysis to trade (PE ratios, EPS, book value, ect) it is the charts and technical analysis that will show you the actual money flow of a stock. The bottom line, the trend is your friend except at the end. Reading charts of stocks will show you patterns and signal where the money is going and flowing. Remember, it is money flow that moves stock prices not opinion from some talking head on the financial news channel. How many times have you seen a company report great earnings only to see the stock plummet and vice versa? Often, the chart will tell us this will happen before it does. Chart reading will also help traders to place stop losses and know where pattern breaks down or fails. Traders must understand that it is just as important to know where you are wrong on a trade as it is to know when you are correct. Charts do all of these things and more when a trader can read them. Every trader and investor should get educated in reading and understanding charts.

 

 

Nicholas Santiago

 

InTheMoneyStocks

Share this post


Link to post
Share on other sites

Yes the point is to get specialized in the field where we wishes to enter and make money or we will be loosing our capital rather than earning any amount from trading business.

Share this post


Link to post
Share on other sites

Very good post, thank you! I would say in addition however, that this is true for every asset. Be patient and set rules, like the 10 percent. A good example for why it is important to only trade with money you can lose, is that why you perform better in demo accounts. Simply because you are not stressed about losing it. You might make some bold moves but oh well. It was just chips like in free online poker.

Share this post


Link to post
Share on other sites

Yeah, I think what you highlighted here is trading 101 and should not be neglected. Just as Livermoore said: "The game taught me the game. And it didn’t spare me rod while teaching." Even he lost almost everything not even once until he learned this lesson.
When you have money they lose you're more likely not to make desperate moves and have patience to wait for the right time.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Renko Full Throttle PRO Indicator Updated Version Features:1-Enhanced the Entry and Exit Signals and now most of the pairs success ratio is above 80%.2-Added a new input called Max Pips : its used to avoid entry when the market moves quickly in certain direction above this number of pips.3-Added a new input called Min Pips : its used to avoid entry when the market moves slowly in certain direction below this number of pips.4-Success ratio input is shown in the panel now to show the percent of the successful trades.Also here are some images showing the results of the updated version :    
    • Date : 14th November 2019. USD holds firm; JPY up; AUD & CAD down 14th November 2019.Both the Dollar and Yen have continued to hold firm against most other currencies amid a backdrop of sputtering global stock markets.AUD: The Australian Dollar dove following the release of Australia’s October employment report, which showed the unemployment rate ticking higher, to 5.3% from 5.2%. China’s industrial production growth also slowed sharply in October, to 4.7% y/y verses the median forecast for 5.4% growth, with investment growth falling to a record low. Chinese sales also underwhelmed, while preliminary Japanese Q3 GDP disappointed with growth of just 0.1% q/q, with a 0.7% q/q drop in exports shining a light on the impact of trade protectionism.The Australian dollar dove by over 0.5%, driving AUDUSD to a one-month low at 0.6795, and the AUDNZD cross to a 10-week low, at 1.0625, which coincides with the 20-week SMA. The cross has declined by nearly 2% since the RBNZ unexpectedly refrained from cutting interest rates yesterday. A cross today below the 1.0625 could suggest further fall for the medium term, with next Support at the confluence of 50% Fib. and the 200-day SMA, at 1.0560.EUR: On a brighter note, German Q3 GDP came in at 0.1% versus the 0.0% median forecast, though Q2 growth was revised lower. The data still helped the Euro lift moderately. EURUSD climbed back above 1.1000 after earlier carving out a fresh one-month low at 1.0994.YEN: The Yen remained underpinned by safe-haven positioning, albeit moderate. USDJPY printed a nine-day low at 108.62, while both EURJPY and AUDJPY hit new 1-month lows, with both now amid a fifth consecutive day of decline.CAD: USDCAD is amid a third consecutive week of ascent, and has remained buoyant after printing a 5-month peak at 1.3268 yesterday. The high extended the pronounced gains the pairing has seen since the release of Canada’s October employment report last Friday, which disappointed and caused a reappraisal in BoC monetary policy expectations. At the same time, USOIL prices have turned flat-to-softer following a 1-month up phase, removing what had been a supportive rug from under the Canadian Dollar’s feet. For now, USDCAD looks likely to remain upwardly biased, with the next Resistance at September’s peak, 1.3310, and at October’s 2 consecutive fractals at 1.3345. Support levels are set at 200-day SMA and 50-day SMA.EURCAD: The EURCAD on the other hand, presents a continues slip pf Euro against Loonie. Intraday, the asset forms a triangle since October 25. The support around 1.4554 and 1.4520 is a key gauge that if gives way would open the lows around 1.4420-1.4450. The RSI moving around 50 and MACD lines at neutral suggesting consolidation in the short term. In the medium term meanwhile, the overall outlook remains neutral to positive, while if market holds above 1.4570-1.4580, it would be a confirmation that positive bias is strengthening, with the next daily Resistance area, 1.4670-1.4700.Always trade with strict risk management. Your capital is the single most important aspect of your trading business.Please note that times displayed based on local time zone and are from time of writing this report.Click HERE to access the full HotForex Economic calendar.Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!Click HERE to READ more Market news. Andria Pichidi Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Trade options on futures directly through your NinjaTrader platform with the new Option Chain! This new actionable matrix allows you to quickly access the options available on an underlying futures contract & manage expirations with visibility to strike prices & quotes. Why Trade with NinjaTrader Brokerage? • Discount Pricing: Save on trades with simple low rates • Span Margins: Real-time portfolio margining • Low Minimum: Open your account with only $400 • Free Platform: Includes all key features for live trading Trade options on futures through NinjaTrader Brokerage to save on your trades through deep discount commissions and benefit from industry-leading support. ONLY $.59 per contract with a NinjaTrader Lifetime License* Let Us Know How We Can Help Contact our brokerage team at brokeragesales@ninjatrader.com or 312.262.1289 to discuss how NinjaTrader’s solutions can be customized for both new & experienced traders. * Standard exchange, NFA and routing fees apply. Lifetime License ($1099) required.     Futures, foreign currency and options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. View Full Risk Disclosure.
    • Date : 13th November 2019. Trading The Kathy Lien “Waiting For The Deal” & “Fader” Strategies | 12 November 2019 13th November 2019.Two intraday techniques that aim to identify opportunities for traders to capture the initial directional intraday real move of the market. According to Kathy Lien, with these strategies you are looking to wait for the noise in the markets to settle down and to trade the real market price action afterward.In this webinar, you will learn about:• Timing• Trading Price Action• Fading the MoveAlways trade with strict risk management. Your capital is the single most important aspect of your trading business.Please note that times displayed based on local time zone and are from time of writing this report.Click HERE to access the full HotForex Economic calendar.Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!Click HERE to READ more Market news. Andria Pichidi Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.