If you search the internet you will find many list of rules that
traders follow and abide by - or at least claim to follow. The
rules that you follow should be your own set of rules which should
be a distillation of the following set of rules.
I've presented the rules in general order of importance. I've
also attempted to dispel some myth rules at the end of this
How does a person rank rules? What are the criteria for putting
one rule above the other? Ranking rules is subjective and it partly
depends on your trading style and the instrument that you trade.
Some rules may not even apply to you because your traded instrument
or trading platform doesn't have that facility.
In order to get a feel for how other people ranked rules I took
the 9 most common rules that I could find and placed a poll of
these rules with a tenth option of "rule not mentioned" on two
different forums to see what others thought of the 9 rules that I'd
selected in order to help rate and rank them.
I'm not going to go into the specifics of how the voting was
done etc. but I was encouraged to see that the top 2 were the same
in both polls. In some way I feel that this was a type of
verification of result. I'm going to order the rules according to
the first survey because it has 4 times as many votes as the other
||Plan your trades and trade your plan
||Get out of your losers - use stops
||Other rule not mentioned here
If a market doesn't do what you think it should do, get
||Hit singles and not home runs - little by little
||Biggest loser must be smaller than biggest winner
||Never add to a losing trade (or "average" into a position)
||Lower trade size when trading poorly
||Never turn a winner into a loser
||Keep a positive attitude, no matter how much you lose