Booking reliable profits in financial markets is harder than it looks at first glance. In fact, unofficial estimates suggest that more than 80% of would-be traders eventually fail, wash out, and turn to safer hobbies. But the brokerage industry rarely publishes client failure rates because they're likely concerned the truth will scare off new accounts. In reality, the washout rate could be much higher than 80%.
Indeed, success in trading is difficult and the consistently profitable traders share specific rare characteristics. These 20 rules are tips that long-time pros use to stay in the winner’s circle.
Here are the rules:
- Stick to Your Discipline
- Lose the Crowd
- Engage Your Trading Plan
- Don’t Cut Corners
- Avoid the Obvious
- Don’t Break Your Rules
- Avoid Market Gurus
- Use Your Intuition
- Don’t Fall in Love
- Organize Your Personal Life
- Don’t Try to Get Even
- Watch for Warnings
- Tools Don't Think
- Use Your Head
- Forget the Holy Grail
- Ditch the Paycheck Mentality
- Don’t Count Your Chickens
- Embrace Simplicity
- Make Peace With Losses
- Beware of Reinforcement
The Bottom Line:
Most traders fail to tap their full potential, eventually cashing in their chips and finding more traditional ways to make money. Become a proud member of the professional minority by following classic rules designed to keep a razor-sharp focus on profitability.