The Ten Commandments
The Trader's Ten Commandments
We all know that losing money is a sin. It means you have done what you should not have done and you have left undone what you should have done. In such event, you must repent and in future obey the rules. Below are the ten rules I find interesting and very much relates to my personal guidelines and therefore I feel they live up to be called the ten commandments. The first rule is very much associated to Warren Buffet. :) Enjoy...
1) Thou shalt not lose any money - chances are you won't get it back.
2) Dont risk money when you do not have to - you can beat the market by not being in the market all the time. Consistently strive to improve the risk-return ratio.
3) You can beat any index or stocks by owning only a part of it - Its easier to idenfity the average than to spot the best.
4) When you do invest, only go for those with >50% probability even though it is not a certain outcome.
5) If you hold a position that is going wrong, cut it - always have an exit point ready and stick to it.
6) At all times, only go for strongest or relative strength trends or short only the weakest. - If unsure, dont trade.
7) Adopt a money management system that dynamically cut out losses, exploits an up trend and changes in unit size with respect to capital availability.
8) Always diversify - be reasonable as you don't want to end up having too much to manage.
9) Use methods with the lowest possible cost to trade - makes a good system better
10) Setup your affaird in a way that eliminates if not minimizes your tax burden - optimizes the system.
Courtesy of David Keller
"Breakthroughs in Technical Analysis"
We all know that losing money is a sin. It means you have done what you should not have done and you have left undone what you should have done. In such event, you must repent and in future obey the rules. Below are the ten rules I find interesting and very much relates to my personal guidelines and therefore I feel they live up to be called the ten commandments. The first rule is very much associated to Warren Buffet. :) Enjoy...
1) Thou shalt not lose any money - chances are you won't get it back.
2) Dont risk money when you do not have to - you can beat the market by not being in the market all the time. Consistently strive to improve the risk-return ratio.
3) You can beat any index or stocks by owning only a part of it - Its easier to idenfity the average than to spot the best.
4) When you do invest, only go for those with >50% probability even though it is not a certain outcome.
5) If you hold a position that is going wrong, cut it - always have an exit point ready and stick to it.
6) At all times, only go for strongest or relative strength trends or short only the weakest. - If unsure, dont trade.
7) Adopt a money management system that dynamically cut out losses, exploits an up trend and changes in unit size with respect to capital availability.
8) Always diversify - be reasonable as you don't want to end up having too much to manage.
9) Use methods with the lowest possible cost to trade - makes a good system better
10) Setup your affaird in a way that eliminates if not minimizes your tax burden - optimizes the system.
Courtesy of David Keller
"Breakthroughs in Technical Analysis"
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