There are six basic rules that set the foundation for successful investing and trading in the stock market. Use the simulator and be reluctant to trade live in the market, don't trade too often, stay with a trading style that works for you, develop your own trading style, listen to your inner voice, and trust yourself.
1. Endeavor to have at least a 75% paper trade success rate on a simulator before you start trading live in the market. Most traders make good profits then turn right around and lose the profits because they are too eager to trade. Be reluctant to trade. Trade only when you are completely confident and comfortable. Do not trade because you have an electric bill to pay. Pressure of that sort will make you go with an emotional decision rather than a logical one. If you take a big loss, well you MUST go back to paper trading on the simulator. Don't cheat yourself and think it is okay to just ignore the problem. Something went wrong and you need to redirect your discipline and skills.
2. Most Traders trade too often. Traders are so obsessed with making money that they throw their hard earned profits away on weak trades or weak market days. The less trading you do, the more you will base your selections on only the best. This will create higher returns since you will have fewer losses.
3. Once you have a trading style and strategy that works for you, don't change it until it stops working. Don't fix what isn't broken and don't chase fads. Those traders who try to take short cuts to wealth are the ones that lose in the end. Wealth takes time, and it takes effort, and CONTROL. Most people who win the lottery lose all of it in less than a year because they haven't learned how to control that kind of money. Ask yourself if you are ready emotionally for larger profits. Do the financial self-worth test once in a while. Making money isn't the problem, it's learning how to manage it.
4. Do not compare yourself to other traders. You are an individual and you can develop your own unique trading style that is yours alone, and focus on trading successfully every time.
5. Pay attention to small details, maintain focus, and ignore the constant noise of the market and other traders. If you spend too much time listening to the media, news, and other traders, you will lose your ability to hear your inner voice. The Traders who say, "I knew I should have done this or that, but I didn't" have lost the ability to listen to their inner voice.
6. The most important lesson is to trust yourself and your ability to do this job. People sabotage their own dreams and goals all the time and never realize it.
Written by Samory Borry
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