Most traders and investors treat trading as a hobby, because, they have a full-time job doing something else. However, If you treat trading like a business, it will pay you like a business. If you treat like a hobby, hobbies don't pay, they cost you...!
Anyone who wants to become a profitable stock trader need only spend a few minutes online to find such phrases as plan your trade, trade your plan and keep your losses to a minimum.
For new traders, these things can seem more like a distraction than actionable advice. If you're new to trading, you probably just want to know how to hurry up and make money.
Each of the rules below is important, but when they work together the effects are strong. Keeping them in mind can greatly increase your odds of succeeding in the markets.
Key Takeaways Treat trading like a business, not a hobby or a job. Learn everything about the business. Set realistic expectations for your business.
Rule 1: Trade based on Rule, when in doubt, stay out, Always Use a Trading Plan
Rule 2: Treat Trading Like a Business, not as a hobby
Rule 3: Proper position sizing is the key
Rule 4: Use Stop loss never trade based on hope, Protect Your Trading Capital
Rule 5: Constantly Analyze your mistakes and try to learn from it, become a student of the markets
Rule 6: Think about the risk potential before your reward potential, Risk only what you can afford to lose
Rule 7: Develop a methodology based on Facts, The objective is not to buy low and sell high, but to buy high and to sell higher
Rule 8: Trend is our real friend so Don't fight the trend
Rule 9: Never, under any circumstance add to a losing position
Conclusion Understanding the importance of each of these trading rules, and how they work together, can help a trader establish a viable trading business. Trading is hard work, and traders who have the discipline and patience to follow these rules can increase their odds of success in a very competitive areas.
This post is just for educational and motivational purpose, See you all next week. 🙂 RK
Disclaimer. I am not sebi registered analyst. My studies are for educational purpose only. Please Consult your financial advisor before trading or investing. I am not responsible for any kinds of your profits and your losses.
Great thing very few people like you sir who treat trading as business our sir teaches trading as business in that we treat stop loss not as loss but we treat stop loss as business expense which doses to earn income so stop loss is actually business expense