1. This is a second series of the rules for the day traders which can enable them to make money from stock market and are enumerated in succeding paragraphs. However the first series can be assessed at http://day-trading-shares.blogspot.com/2008/05/day-traders-golden-trading-rules.html
(a) One should avoid the tendency of averaging a loss making trade as it is like catching a falling knife.
(b) One need to be patient in the market and thus should avoid getting out of the market just because one has lost patience, or get in because one has been anxiously waiting to make a trade.
(c) One should avoid taking small profits and definitely avoid large losses.
(d) Once an individual has placed a stop loss than never cancel the same as first reaction is always the best reaction. However place the stop loss a bit below supports and a bit a bit above resistances as big fishes try to get weaker hands off the market by making the stop losses at supports and resistances hit prior to a big move.
(e) Avoid too frequent trading and their is no need of getting in and out of the market too soon.
(f) One should be comfortable by going short or going long and thus should be able to make money from both sides of the market.
(g) Try to avoid the tendency to buy or sell just because the price is low or high.
(h) As a golden rule do not book losses in paper and also never hedge a losing position.
(i) If one has taken a position than one should never change the position without a good reason as first reaction is always the best reaction.
(j) It is better to take a break if one is having a prolonged periods of success or failure.
(k) One should avoid guessing the tops or bottoms as market is supreme.
(l) Always remember that your personal reasoning is the best decision as one can atleast blame oneself for own decision and thus it is advisable that one should not follow a blind man's advice.
(m) As a rule avoid getting in wrong and out wrong; or getting in right and out wrong. This is making a double mistake.
(n) Last but not least and it is that When one loses one should not blame his luck.
2. If one is able to follow the rules enumerated above than as a day trader none can stop an individual from making money from the stock market.
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30 May 2008
Day Traders Golden Rules to make money from stock market daily- Part- II
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