Trading Rules
1…Who are you??? What are you??? And what do you want to accomplish today…Are you day trading, swing trading or what. Scalp mode today?? Know what it means to scalp a trade?? Do not be in the middle here, one way or the other. If you have a doubt about what you’re going to do with the stock your trading, you’ll make mistakes. Should I keep it for a day or two? Should I scalp it? Should I trail a stop? Indecision will destroy the trade right then and there!
2…How much is enough money to make today??? Set that number first. A must. Look the biggest problem everyone has is when to sell. We all have this ongoing battle with Mrs. Greed. She sits there on our shoulder opposite Mr. Fear. They are eyeball to eyeball, and WE are in the middle of this battle. You must have it pre set in your mind as to when to exit. And then just do it, either by getting stopped out for a gain, or selling “too soon”. I always try to sell to soon as the stocks running up. Now how much money have you placed in your acct. to fund this business of yours? Enough??? Tight money will kill you. This part alone could sabotage your entire game plan, for the day or for your trading life.
3…What is your predetermined rule for entries and exits if you get into a trade for the day…Do you understand completely Support and Resistance’s on any chart any time frame, and do you have the ability to draw lines on your real time charts to help you SEE these area’s and then SET Alerts intraday to get you in or out??
4…Do you have the correct hardware, software, and real time charting service, Online Direct Access Broker. Without it, don’t even think about coming to the dance. How about Cable modem, dsl line, etc, how about a back up computer all set up and running in case yours conchs out? What is your back up?
5…Determine what a “Trend Day up or down is, and can you recognize this event? Do you have a complete working knowledge of Candlesticks and or Point and Figure Charting techniques…and what tells you what kind of a day it is, are you fighting the trend? Are you trading the long side when we are falling like a stone that day?
6…. Do you follow and understand the futures markets the S&P’s and NQ’s? Can you understand what they are telling you, how about Tick and Trin, got those down pat?. Do you read volume and watch Level II…can you determine buying and selling pressure..
7…Can you spot a “Divergence in your charts and indices…what does it mean to you while day trading…How can you take advantage of these divergences that others have NO clue about to your advantage…reading between the lines…using solid techniques at all times…
8…How do you have your charts set up for real time data feeds? What moving averages are you using, what time frames do you use…and what if any indicators or oscillators are you using in conjunction with your charts…
9…STOPS!!! Are you using hard stops or mental stops, and do you use them automatically? Do you know where to place them? How about the gaps each day, what are you doing to the morning novice gaps?? Chasing them or selling them…
10…And then what about your general make up…how do you handle things emotionally…can you control those demons on your shoulders, Mr. Fear and Mrs. Greed!!! Are you screaming at the screen, cursing and throwing things, pounding your fists on the keyboard? What are you doing to combat all theses internal emotional problems…because with everything I have written about in this article, …without absolute control over your trading, over your emotions, your D-O-A.
From Jerry Olson's site.
AI
