It doesn’t matter what you trade, it’s how you trade that makes you successful or not!
The 7 Day Challenge
Only about 5% or less of you all will actually do this but I’ll make the challenge anyway. I am already a strong believer in following a trading system or I wouldn’t keep writing and preaching about it. But once you have a reliable set of trading rules, your discipline can help you reap huge rewards.
Read these rules before your day starts for just 7 days! I promise you that your whole way of thinking and trading will change in just 1 week.
Rule #1: Follow Your Written Trading Plan
If you didn’t guess that this was the first rule then you haven’t been reading my blog long enough. This is the #1 reason why traders fail. It is human nature to want to vary or break rules and it takes discipline to continue to act in accordance with the established rules.
Write out a plan, even if it’s simple at first, and follow it religiously.
Rule #2: Keep Learning On A Daily Basis
The markets are changing every single day and the strategies that you may have used 5 years ago might not work now. You need to continue to educate yourself on a daily basis.
Read an article or watch a video tutorial, and over time you will build a huge knowledge base that is fundamental to successful trading.
Rule #3: Don’t Let Losses Compound
Per your trading plan you should already know when and where you will cut your losses. Whether it’s a technical failure or percentage move doesn’t matter as long as you have something in place to mitigate risk.
Some traders have an even lower tolerance for loss than you might have which is fine. The key point here is to have set points (stop loss) within the limits of your tolerance for loss.
Rule #4: Never Set A Price Target
Hear me out on this. Don’t set a price target and automatically get out of good trades. If you are long a Call and the stock hits your “target” don’t just automatically exit! Let profits run wild. Place a trailing stop loss order and see how high it can go from there after locking in gains.
Realistically, I can never pick tops and neither can you, so why exit? Never feel a stock has risen too high too quickly (or fallen too low too quickly).
Rule #5: Master One Strategy At A Time
Never jump from one trading style to another. Master one style and strategy first rather than becoming average at several. Focus and work hard to completely understand every angle, abnormality, risk, reward of say Credit Spreads and then move on to Iron Condors.
Don’t be a jack of all trades when it comes to options trading until you have experience.
Rule #6: Listen To The Charts (My Favorite)
In case you didn’t already know, you cannot effect the market. Sorry, but you just can’t. Praying, pleading, and even giving up your 1st born son won’t even help. So stop hoping and wishing already!
Everything is reflected in the price and volume when it comes to technical analysis – this is why I favor it over any other system. Master the charts and let them guide you.
Rule #7: Don’t Make Excuses, I Have No Pity!
We live in a period of time where there is limitless opportunity to build massive wealth. The wealth of information and training online today about trading is incredible – and for the most part free.
I don’t pity anyone who gives me an excuse as to why they are not successful! Work hard now and the reward will be great at the end of the day.
Rule #8: Stop The "Analysis Paralysis"
Start trading more often and stop analyzing the markets to death. Now of course don't take this over board and become a day trader. The point here is that you set up a system and continue to make trades - even if they are small trades (1 or 2 contracts at a time).
Most people just analyze and analyze but never get in! How are you ever going to learn? Start small but keep trading. If you learn to master trading with only a few shares, then trading a couple hundred or thousand shares will be much more successful.
Rule #9: Walk Away From The Computer
My own personal morning routine includes this element and it’s essential for clearing your mind. Successful trading isn't solely about trading - it's also about being emotionally and physically strong.
Reduce the stress every day by taking time off the computer and working on other areas of your life – especially family. A stressed out trader will not make it in the long run.
Rule #10: Be An Above-Average Trader
We all trade for 2 simple reasons: Money and Freedom. In order to succeed in any market you need to set your expectations high. Don’t settle for mediocrity.
Stay motivated and set realistic and achievable goals that continue to take you to the next level. And finally, ask for help from others, get a coach, or join a trading forum to keep you accountable.
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