Remix: 10 Rules for Rookie Day Traders

There are always going to be different sets of list for new traders. All offer some value. We are always going to believe our rules are better, obviously we are biased. Michael Sincere wrote a post entitled 10 Rules for Rookie Day Traders.  His rules are in bold with comments below.

Here is our philosophy around trading rules:

Rule should be designed to promote growth, not create limitations.
Rules should make YOU better.
Rules need to be second nature.

1. The three E’s: enter, exit, escape

Disagree, I can’t explain for proprietary reasons.

2. Avoid trading during the first 15 minutes of the market open

I agree that the first 15 minutes is risky but the most important thing to a new trader is lasting as long as possible. You are going to be better the more time that goes by, but you learn faster by doing. It is a tough balance.

3. Use limit orders, not market orders

Limits keep you out of the market, which is important. But they can also keep you in a market, which is of importance too.

4. Rookie traders should avoid using margin

Agree. Your winning positions should be larger than losing position, but a new trader doesn’t usually know which is which.

5. Have a selling plan

Agree.

6. Keep a journal of all your trades

Agree, but the role of a journal is to be able to make changes and note the reaction to the changes. I think it is a huge mistake to not learn equally from wins and losses.

7. Practice day trading in a paper-trading account

Have to treat it like the real thing and stop when you can’t.

8. Never act on tips from uninformed sources

Agree.

9. Cut your losses

Cutting losses are important, but defining what a loss is more important in the beginning.

10. Be willing to lose before you can win

More accurately said be willing to LEARN before you can win.

We are both right and I hope you, the reader, learned something from each.

His article is here 10 rules for rookie day traders, I encourage you to check it out.

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  • rookie trader

    Right out of the gate on item 1, you say you disagree and then cop out on why.  Proprietary reasons?   I don’t believe it.  I would really like to see some explanation here.  There is nothing so proprietary that you can’t at least explain it in general terms.  

One Response to Remix: 10 Rules for Rookie Day Traders

  1. rookie trader says:

    Right out of the gate on item 1, you say you disagree and then cop out on why.  Proprietary reasons?   I don’t believe it.  I would really like to see some explanation here.  There is nothing so proprietary that you can’t at least explain it in general terms.  

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