Skilled Traders Rules of Thumb

Skilled traders find a strategy or market pattern that offers a high probability for success ... they make money by exploiting this edge over and over again.

Skilled traders never deviate from their methodology or “wing it”.

Skilled traders never enter a trade without an entry and exit strategy ... they know exactly when and where to cut their losses as well as taking profits.

Skilled traders never ever let a winning trade turn into a losing one ... the easiest way to ensure that this doesn’t happen is to place a protective stop at or a few ticks in the money once your position is up several points.

Skilled traders never hope, pray or wish that their stock would go up. They understand that when they are wrong they are wrong and the best thing to do is cut their losses short.

Skilled traders never trade with their emotions ... they don’t allow themselves to get caught up in the latest and greatest investment hype.

Skilled traders always have one goal in mind: To preserve their capital at all costs. They do this by never taking on too large of a position ... never use more than 5% of your funds on any one trade ... this way in the worst-case scenario the stock could drop to zero and your account would not be severely affected.

Skilled traders never get too greedy. There is an old saying that “Pigs get fed and hogs get slaughtered” ... skilled traders don’t try to make one big trade that will turn them into instant millionaires ... they don’t try to hit home runs, instead they understand that it is better to keep hitting singles and making smaller consistent profits.

Skilled traders enter and exit trades swiftly and decisively.

Skilled traders listen to no one else’s opinion concerning the market or particular trade they are in.

Skilled traders are often contrarians. ... they will be buying when others are too scared to and sell when the crowd starts buying.