Techno Funda Investing
Techno Funda Investing

@TechnoFunda6

12 تغريدة 20 قراءة Oct 08, 2022
Thread 🧵on Few Important Trading Rules
Must Read for all kinds of #Trading - Be it Intraday or Short Term Trading
Summary of Chapter from 📘Relative Strength With Technical Analysis by @YTA_School
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#tradingpsychology
1⃣ Always have a Trading Plan
It is said 95% traders lose money, especially beginners. This happens to those who don’t have trading plan.
Remember Benjamin Franklin's quote “Failing to plan is planning to fail”
Key to becoming successful in trading is to stick to trading plan.
2⃣ Treat Trading as Business
Many people consider trading similar to gambling or just consider trading as their hobby. In most cases, such people often lose money in trading.
Get-rich-quick mindset that comes with gambling is not at all suitable for the stock market.
3⃣ Always have a Trading Journal
If you want to become consistent & profitable trader then you must develop a habit of maintaining trading journal.
Just maintaining trading journal is not enough, you should review it at regular intervals & take corrective actions if required.
4⃣ Risk Only What You Can Afford to Lose
When trading, never violate this rule. If you fail to follow this rule, you will end up losing all of your money.
Before investing or trading, one must take adequate medical & life insurance cover & also have 12 months of living expenses
5⃣ Use Technology to Your Advantage
To stay ahead of others, one should learn to take full advantage of technology
Use of charting websites, websites offering financial data, stock screening websites, etc
Technology can also be used for back-testing of trading plan & strategy
6⃣ There Exist No Holy Grail System
Traders waste time & money in search of system that can help to accurately predict market tops & bottoms. But in reality, such system does not exist.
Remember – “Only two people can buy at bottom & sell at top – one is God & other is liar”
7⃣ Always Apply Stop Loss & Follow it Strictly
Most traders, especially beginners lose money in trading because they fail to apply stop loss.
To be successful in trading, one must strictly follow their stop loss (initial & trailing stop loss)
8⃣ Trend is Your Friend
There is common saying related to trading, “Trend is Your Friend.” It is important rule that one needs to follow to consistently make money in trading.
Always remember, you are more likely to make money as a trader if you trade according to momentum.
9⃣ Avoid Market Noise in Trading
Today with loads of information available at fingertip, it is important for a trader to stay away from ‘Market Noise’ to become successful.
By using noise-removal techniques, traders can avoid false signals & get clearer picture of overall trend
🔟 Avoid Emotions while Trading
Human emotions of fear and greed are often recognized as two key drivers of any financial market.
Knowing how to control these emotions while trading can prove to be the difference between success and failure.

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