1. Never Average a Losing Position — Under any circumstance add to a losing position ever! Always Remember Averaging Bring the cost down but it increases trade size which can lead to Ruin of trading account.Holding to losing positions costs measurable sums of actual capital, but it costs immeasurable sums of mental capital.
2. Trade like a Chameleon — Most of traders i have interacted during my trading sessions have faced this major psychological issue Unable to reverse the position when SL is Hit, Most of the losses will be covered once we reverse positions but it comes with lot of Practices and Determination.
3. Never be Biased — Remember the Old Age Adage “Markets can remain illogical longer than you or I can remain solvent,” Always trade with a SL and never ever do over leverage. One Bad trade can ruins months of Profits.
4. Sell Weakness Buy Strength — Sell Stocks that show the greatest weakness, and buy those that show the greatest strength, Easier said than Done.. Biggest money is lost in finding top and bottom. Many readers have bought ADAG Stocks and NBFC stocks,Yes Bank in this year crash but very few bought HDFC Twins or Kotak.
5. Know Your Trading Cycle— As Gann Said Know When your Trend Change Trade large and aggressively when trading well, Trade with small quantity when trading poorly.
6. Believe in KISS( Keep it Simple and Stupid) — Keep your trading method Simple. Complicated systems breed confusion; simplicity breeds elegance.
7. Be patient with winning trades; be enormously impatient with losing trades. Remember it is quite possible to make large sums trading/investing if we are “right” only 20% of the time, as long as our losses are small and our profits are large.Managing your losers could be the difference between being a successful trader and a mediocre one.Sit on your hands, be patient and wait for the markets to give you an opportunity.
8. Learn to Sit on the Positions– Biggest money is made when we learn to Hold on to the positions. The hard trade is the right trade: If it is easy to sell, don’t; and if it is easy to buy, don’t. .
9. Keep Learning — The markets are changing every single day and the strategies that you may have used years ago might not work now. You need to continue to educate yourself