Tips and Rules Every Trader Needs to Know

A few minutes of internet research is all it takes to be a successful stock trader. You can find phrases like “plan your trade; trade you plan” and “keep loss to a minimum”. These little bits of information can be more distracting than actionable advise for new traders. If you are just starting out in trading, you may simply want to learn how to get started and make money.

Each tip below is important but the results are stronger when they work together. Your chances of success in the markets will increase if you keep these rules in mind. For more information look at this Gary Fullett article

Always use and follow a trading plan

A trading plan describes a written set or rules that outlines a trader’s entry, exit and moneymanagement criteria for every purchase.

Today’s technology makes it easy to test your trading idea without risking any real money. also known as Backtesting , allows you use historical data to evaluate your trading ideas and determine if they are viable. The plan can then be used in real trading once it has been backtested.

Sometimes your trading plan may not work. Retire from it and begin again.

It is important to follow the plan. It is considered poor trading strategy to take trades that are not part of your trading plan, even though they may be successful.

Make Technology work for you

Trading is a competitive market. It is reasonable to assume that anyone on the other side of trades is making the most of technology.

Charting platforms allow traders to see and analyze markets in a variety of ways. Backtesting an idea with historical data helps to avoid costly errors. We can track trades wherever we are by accessing market updates from our smartphones. High-speed internet access, which is something we take for granted can significantly improve trading performance.

It can be fun to use technology to your benefit and keep up with new products in trade.

You can only risk what you are able to afford to lose

Before you begin using real money, verify that the trading account’s funds are not illegible. Traders should save as much money as possible until they have enough.

You should not use the money in a trading account to pay for tuition fees or mortgage payments. Traders shouldn’t think they’re borrowing money to pay for these important obligations.

Losing money can be devastating enough. It’s even worse if the capital was never risked.

Protect Your Trading Capital

It takes a lot of effort and time to save enough money to fund your trading account. It’s even more challenging if you have it done twice.

It is important that you remember that protecting your trade capital doesn’t mean that you won’t lose any trades. All traders lose trades. Protecting your capital means not taking unnecessary risks, and doing all you can to keep your trading business afloat.

Treat Trading as a Business

Trading must be approached as a full or part-time career and not as a hobby.

You don’t have to commit to it if you approach it as a hobby. If you are looking for a job, it can be difficult because there isn’t a regular salary.

Trading is a business. You will incur expenses, losses, taxes and uncertainty. Traders are in essence small-business owners. You must strategize and research to maximize your company’s potential.

Keep Trading in Perspective

Keep your eyes on what is important when trading. Trading is not about losing trades. A winning trade can only be one step in the journey to a profitable business. It is cumulative profits that make a big difference.

Trading performance will be less affected if traders accept losses and wins as part their business. Although we may be excited by a profitable trade, it is important to remember that losing trades can still happen.

To keep trading in perspective, it is essential to set realistic goals. Your business should make a reasonable profit in a reasonable time frame. You are setting yourself up for failure if your goal is to become a multimillionaire by Tuesday.

Become an investor in the Markets

Consider it continuing education. Traders should be able to focus on learning new things every day. It is important that traders remember that understanding markets and all their intricacies takes a lifetime.

Hard research helps traders understand the facts. For example, what do the various economic reports mean? Traders can sharpen and understand their instincts by paying attention to details and observing.

The markets are affected by world politics, economic trends, and news events. The market environment is constantly changing. The future is unpredictable and traders need to be more familiar with the market environment.

Use facts to develop a methodology

It’s worth taking the time to create a sound trading method. Although it may seem tempting to believe in the easy-to-print money trading scams, this is not the best thing. A trading plan should be based on facts, and not emotions or hopes.

Trader who aren’t in a rush to learn often have a easier time perusing all the information available online. You should consider this: Before you can apply for a position within a new field, you will need to spend at least a year studying at college. To learn how to trade, you will need at least the exact same amount of research and study.

Always Use a Stop Loss

A stop-loss is a predetermined level of risk that a trader will accept for each trade. It can be either a dollar amount, or a percentage. However, it limits trader’s exposure. Stop loss can reduce the stress of trading as we know that we will lose X amount in any given trade.

A stop loss is not a good practice, even if it results in a winning trade. A stop loss is a way to exit a trade and still make money trading, provided it does not violate the trading plan.

Although it is desirable to make a profit on all trades, that is unrealistic. A protective stop loss can help limit your losses and protect you from potential risks.

Know when you should stop trading

There are two reasons you should stop trading: ineffective trading plans or ineffective traders.

A trading plan that is ineffective results in much higher losses than was anticipated from historical testing. It happens. This could happen because markets may have changed or volatility may have decreased. The trading plan isn’t performing as expected for any reason.

Keep your businessmanship and emotions in check. It is time to evaluate your trading plan and make changes, or to start over with new trading plans.

An ineffective trading plan can be a problem that needs solving. This is not always the end for trading.

A trader who is not able to execute a trading strategy is an inefficient trader. Poor habits, stress from external sources, and inactivity can all contribute to this problem. Traders who are not in peak trading condition should consider taking a vacation. The trader can then return to trading once all the difficulties and problems have been addressed.



An important aspect of trading is understanding how each rule works together. This will help traders establish a sustainable trading business. Trading is hard work. Traders who are patient and disciplined enough to follow these rules will have a better chance of succeeding in a competitive marketplace.