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
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
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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