Many new traders often fail to make money in the stock market in the beginning.
Often times they blowout an account in a few months and walk away sad and empty.
This is because they failed to follow a set of rules.
Use the rules below to increase you success in the stock market.
Having too much Risk per Trade - Money Management Any one trade can wipe you out.
Determine how much you are willing to lose on each trade and don't have a position size larger than that.
No matter how good the trade looks keep to the position sizing.
Capital preservation is the number one thing that will keep you in the game.
Using too many Indicators Every indicator is calculated slightly different so some will give a buy signal while others are giving a sell signal.
It's rare for all indicators to plan in the same direction.
Having too many indicators can led to "Analysis Paralysis.
" Remember, price always trumps any indicator.
Neglecting to use a Trade Journal A properly recorded trade journal is the best thing for a trader.
By writing past trades down, you will learn what works and what doesn't.
Using Mental Stops Often new traders will lower their original mental stop resulting in a larger loss.
Use mechanical stops or rigid stops to do the hard work for you.
Place stops immediately after entering a trade.
Undisciplined Trading Novice traders impatiently takes trades at the wrong times and do not follow a trading plan.
Successful traders place trades when the rules state so and exit when profit or loss targets are reached.
Never take a trade just to place a trade.
Trading without a Trading Plan A Failure to Plan is a Plan to Fail.
A good trading plan is absolutely priceless.
Take your time to develop a plan with clear entry and exit criteria.
This is the most important rule because it incorporates all the rules mentioned above together.