The basic rules of successful trading

Master class: Exchange for beginners

From A. Elder's book "How to Play and Win on the Stock Exchange":

 "A professional trader plays with his head and shows restraint. Delight and despair during the game is the domain of amateurs. The emotions are not a luxury allowed in the market".

To paraphrase Count Tolstoy's winged expression: "All successful traders are alike, every unsuccessful trader is unsuccessful in his own way".

Trading system developmentThere are a lot of opinions on what a beginner should focus on. trader The main emphasis should be placed at the beginning of your journey. In our opinion, the closest to the truth is that you can hardly expect comfortable and profitable trading without relying on some dogmas that the most successful traders of our time agree on. As much as you would like to start climbing to the top of Olympus sooner, their fulfillment is the main step on the way to acquiring the necessary attributes of successful trading.

The tips for beginners that we will give below address all the aspects mentioned. Following them will undoubtedly guide your learning in the right direction. Most of the most successful traders unequivocally agree that there are so-called "inviolable" rules.

So, we present to you the 10 basic "commandments" of successful trading:

1. Plan your actions and strictly follow that plan.
2. Accept losing trades as an integral part of this business. Treat them calmly. Pay attention to the amount of loss from one trade, not the number of losing trades.
3. Remember that not having a position is also a position.
4. Strive for simplicity: complex analytical tools are not always effective.
5. Follow the trend.
6. Use protective stop orders to limit potential losses. Always execute your stop orders!
7. Keep profitable positions as long as possible, close losing positions in time.
8. Set the ratio of possible profits to losses to no less than 2:1.
9. Only add to profitable positions.
10. Use money management techniques to determine trading volume.

By following these rules, you increase your chances of success by several times. But!!! In order to maximize your skill level, you must also keep in mind what not to do under any circumstances.

So, fatal trader's mistakes or 10 "can'ts":

1. Never add to unprofitable positions.
2. Do not focus on the results of individual trades. The only important thing is the final result for the month, quarter or year, depending on your trading style.
3. Don't make a psychological distinction between a long position and a short position.
4. Don't hedge a losing position. Instead of one problem, you may get two.
5. Do not trade a large number of instruments with a limited amount of capital.
6. Don't try to catch the exact high or low of the market.
7. Don't trade in a rapidly changing market.
8. Do not give in to emotions. Make a plan for your work in the market.
9. Don't let a profitable position end up being a losing position.
10. Don't forget the principles of effective money management.