BY LICIA LESLIE

Hi Shoppers,

It’s that time of year, half way through, that I like to do a self check.

As traders, we’re pretty much self employed.

If you don’t evaluate yourself, who will?

Your account balance will, that’s for sure.

Before it comes to that, take an honest look at trading practices.

Am I trading as well as I should be?

Where am I falling off?

Here are my …

Seven Rules for Trading

1 – Stick to your trade plan

When you veer off your plan, you involve emotion.

And, frankly, there’s not a worse move a trader could make.

Once emotions enter and discipline goes out the window, the likelihood of making smart decisions goes down exponentially.

2 – Know your target entry and exit prices before you enter a trade

Anyone out there ever chase a trade?

Anyone?

I know I’m guilty.

And, shockingly, it has rarely worked out in my favor.

Know how much you’re willing to pay to enter the trade — and how much you’re willing to lose if the trade goes against you.

3 – Check for stock news before you enter a position

Is there an upcoming earnings report?

Did bad news just come out about a clinical trial?

This step may seem insignificant, but it could be the difference between a winning trade and a losing one.

This mistake is COMPLETELY avoidable … it’s just a quick internet search.

4 -Always be learning

The second you think you know everything is the second you’ll plateau.

Learn from your mistakes.

Learn from traders who are smarter than you.

Learn from the mistakes THEY make.

Never stop learning!!!

5 – Cut your losses

Never let a loser run so far that you cannot come back and trade the next day.

You can always re-enter a position with a new and improved trade plan — if you have money.

The most important thing is to keep yourself in the game.

The moment you let a trade slide too far into the negative is the moment you bench yourself.

And if a trade really runs away from you, you could bench yourself for good.

To make money trading, you have to stay in the game.

That starts with cutting your losers early …

That’s why I respect a 30%-35% stop loss on all trades.

Maybe your risk tolerance is higher.

It’s up to you to decide what you’re comfortable with — and more importantly — to respect that stop loss.

6 – Understand that you are not bigger than the market

This is critical. The sooner you embrace it, the better off you’ll be.

You have to realize that the market will always outlast your trading account, no matter how big it grows.

Not to mention, the market often moves in unpredictable and irrational ways.

Do not try to bend the market to your will.

We take what the market shows us  and find ways to position ourselves to make money around it. 

Finally…

7 – Stick to your trade plan

Hey, wait a minute!

That’s right. This one’s so good, I put it in twice.

If you adhere to just one core principle on this list, let it be this one.

Thanks for Reading … See You Next Tuesday, 

Licia Leslie