Have you ever wondered how professional traders see the market differently?
How do they continue to make exceptional returns day after day, while 90% of retail traders lose money on a daily basis?
Here are my top 10 trading rules I developed, after over 10,000 hours of trading professionally, and I hope that this will help you take your trading to the next level.
1. Always be disciplined
- Follow your plan and rules
- Do not be swayed by your emtions to act otherwise
- Do not create excuses to break the rules – this time is NOT different
2. Plan the trade, trade the plan
- Always cut your losses according to plan
- Always cut your profits run according to plan
- Separate your planning from your execution
3. Expect losses
- Losses are part of trading – accept them. This will reduce emotional resistance when the time comes to do so.
- Do not take a trade unless you are willing to accept the risk (possibility of loss) that accompanies the trade
- Accept that you willlose money on some trades
- Take your losses easily when they come
- Do not be stubborn and bend your rules
4. Manage your emotions
- When i doubt or unsure, get out!
- Always analyze objectively
- Clear all positions to have a neutral frame of mind
- Do not act based on greed or fear
5. Focus on trading well
- The goal of a trader is to make the best trades
- Money will naturally follow
- If you focus on money, emotions will get in the way and you will not be able to make the best trades
6. Do not overtrade
- Be patient. Do not rush into a trade.
- Do not trade when there are no good setups
- Do not try to be in the market all the time
- It is better to miss a boat, than to leave on one full of holes
- One good trades is better than three bad trades
- “There is a time to go long, a time to go short,and a time to go fishing.” – Jesse Livermore
7. Trade what you see, not what you think
- Don’t concern yourself with why things are happening
- Observe what is happening, and act on it
- Ignore the noise – tips, rumours, news, speculations, etc
- Anticipate the future, but trade in the present
- Markets are never wrong, opinions are
8. The trend is your friend
- Don’t enter just because it looks “overbought” or “oversold”
- Don’t try to catch a falling knife
- The easiest money is made trading with the trend
- Make sure you have an edge before you enter the market
- Put as many factors in your favour as possible
9. Do not repeat your mistakes
- Keep good records of your trades and thought process
- Analyze your mistakes, then move on
- Do not make the same mistake again
- Continuously improve yourself
10. Have realistic expectations
- Do not try to make stellar returns overnight
- Aim for small consistent returns over a period of time
- Do not expect to become an expert overnight
- Trading takes time to build experience
Spencer is an avid globetrotter who achieved financial freedom in his 20s, while trading & teaching across 60+ countries. As a former professional trader in private equity and proprietary funds, he has over 15 years of market experience, and has been featured on more than 20 occasions in the media.