It’s kind of strange in a world with no rules (like trading) that it’s so important to have a specific set of rules that you follow religiously.I mean let’s be honest, trading really doesn’t have any rules. You can get in whenever you want. You can get out whenever you want. Youcan add and subtract to your existing position, and you can obviously decide simply not to trade.The only thing that could prevent you from participating is the lack of required money to trade.Other than that, you get to decide what you want to do and when you want to do it.
There are not to many other businesses that allow for that much freedom. Because there really aren’t any set rules, you’ll need to make your own. Otherwise, you’ll most likely be overwhelmed with all the different possibilities in the market.
If you decide to trade without any rules, I promise you will not be successful. Freedom is good, but you need to have what I call a “structured freedom.” Basically, that means you should be able to trade when you want to, but the trades you do need to fall under your set rules. Ruleswillhelp you be more consistent with your trading. They’ll help you avoid mental mistakes that can drain your account.
About once every six months I write a new set of trading rules for myself. These rules help me to be structured with my trading. And you know, it’s the strangest thing, when I have a bad day, it’s because I didn’t follow one or more of my rules. Continue reading “Trading Rules” »
