Jay Kaeppel writing in Optionetics.com gives an interesting set of rules for traders:
The Good News is that a trader or investor with a plan can still enjoy great success.
Jay’s Trading Maxim’s #1, 2, 3
So when in doubt, back to your “roots.” So here are mine:
Jay’s Trading Maxim #1: Your absolute #1 priority as a trader is to be able to come back and be a trader again tomorrow.
Sounds so obvious, doesn’t it? But you would be surprised how many people violate this maxim. And it’s a hideous thing when it happens.
Jay’s Trading Maxim #2a: There are two keys to trading success; the first is to develop a method that has a realistic probability of generating profits in real-time trading (i.e., you must have a plan). The second key is that you must have the emotional and financial wherewithal to follow the plan.
Jay’s Trading Maxim #2b: Without strict adherence to both parts of Maxim #2a, eventually something bad happens and one day you suddenly realize that you’ve violated Trading Maxim #1 and that you are not a trader anymore.
Jay’s Trading Maxim #3: The volatility of the fluctuations of the equity in your account will have a greater impact on your success or failure as a trader than any other factor.
Swing too little and you never quite make enough on the “ups” to offset the “downs”; swing too much and eventually (and Murphy’s Law being what it is, at exactly the wrong time) you cry “Uncle” and one day you find that you are not a trader anymore.