12 Commandments PDF

8/13/2019 12 Commandments PDF

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The 12 Commandments

Of Trading



Today’s Agenda

Why Trader’s Fail

Review the 12 Commandments of Trading

Q&A

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Why Traders Fail

Trading System

MoneyManagement

Trade

Psychology



I. Thou Shalt Treat Every Trade as a Single –

NOT a Home Run

• Too Excited about Winners

• Too Depressed about Losers

• Trading should never be treated as a Race or a

Marathon – It’s a long journey

• No One Trade Should Matter That Much in the “Grand

Scheme”



II. Never Force a Trade – Take a Snapshot

• Never Get Overwhelmed into action for fear of missing a move• Don’t Speculate – Trade Only on 100% Confirmation of Your Trade

• Accept you’ll miss some moves in exchange for missing losses as

well



III. Unplug…When It’s Time to Trade

• Turn of the Chat• Don’t Go to Blogs

• Turn off CNBC

• IM, Facebook, Twitter, Email

• News Analysis, Fundamentals, Rumors



IV. Put the Odds in Your Favor on Every Trade

• Stack the Odds then Let the Market do its thing• You have zero influence on the outcome once tradeplaced

• There’s no…Hoping, Wishing, Praying or Crying inTrading

• Competence leads to Confidence• “It doesn’t matter whether you win or lose, it matters how

much you make when you’re right, and how much youlose when you’re wrong” George Soros



V. Trade for Profit

• This should be your top reason for trading• This should be your mantra when you reach the 90% level on your

trades

• Don’t stumble over a few extra pips

• This should be the reason you follow the rules and avoid breaking

them

• “Greed is Good” only in the Movies



VI. Check Your Ego at the Door

• You will be bruised and battered• You must accept your loss – EXIT – Move On

• Give up the need to be always right

• You can be wrong daily and a big winner

• Sorry, Nobody cares



VII. Stop Making Excuses

• The Blame Game…• The Broker

• The System

• The Internet, Charting, Data

• Wife, Husband, the Dog, the weather, your bad luck, conspiracies



VIII. Minimal Leverage = Maximized Success

• Most Trade Forex Opposite – Maximize Leverage = Wipeout &Refund Account Cycle

• 3.8 Wipeouts on Average/Account Holder

• 1% - 5% Maximum Risk…or less

• Futures, Options Similar

• Biggest accounts risk least, smallest want to risk the most…WHY?

• Understand the Three Legged Stool – System, Risk, Psychology



IX. Follow The 25 Trade Test

• A “rites of passage”• Forces you to learn the rules

• Forces you to back-test (or face doing it in real-time with real

money)

• Forces you to experience wins, losses, trade for profits, near

misses, and most emotions

• You will master the system



X. Always Have Success Mentors

• Learn on the Forums• Do the work, learn from proven traders

• Do watch the Videos, Read the Blog

• Do Attend training webinars (content)

• Consider One-on-One Coaching

• 10,000 Hour Rule “Ultra Fast”



XI. Do Not Over Diversify in Forex

• Many Forex Markets Move in Tandem• Understand their underlying correlation

• It is not like trading stocks or managing a large portfolio

• 2-5 Markets Max is the Sweet Spot



XII. Have Fun

• Making Money• Be Your Own Boss

• Double Business by Changing One Number

• Ultimate Challenge Mentally & Psychologically

• Freedom & Independence



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12 Commandments PDF