My Ten Trading Rules

#1: Avoid The “To Get The Money Back” Mindset

When sharp losses in equity are experienced, take time off. Close all trades and stop trading for several days. The mind can play games with itself following sharp, quick losses. The urge ‘to get the money back’ is extreme, and should not be given in to.

#2: Pay Attention To Volume Climaxes

Big volume kills moves. Climax blow-offs take both buyers and sellers out of the market and lead to sideways action.

#3: Don’t Trade Every Day.

Do not trade every day of every year. Trade only when the market is clearly bullish or bearish. Trade in the direction of the general market. If it’s rising you should be long, if it’s falling you should be short.

#4: Protect Your Trading Capital

The most important rule of trading is to play great defense, not great offense.

#5: Don’t Listen To Opinions

Successful traders isolate themselves from the opinions of others.

#6: Process Over Outcome

Judge yourself not by the outcome, but by your process.

#7: Never Say Never

The greatest inferential mistake: ‘This event never happens in my market.’ Most of what never happened before in one market has happened in another. The fact that someone never died before does not make him immortal.

#8: Protect Your Mental Capital

Mental capital is just as important as financial capital. Protect both.

#9: Talk Yourself Out Of Bad Trades

The single most important thing you can do all day is to talk yourself out of bad trades.

#10: Break Rules, Sparingly

All rules are meant to be broken: The trick is knowing when… and how infrequently this rule may be invoked!