Monday, April 28, 2014

Five Mantras For Traders

This is from Trading Success, a site by Ray Barros: I am repeating the words as it is. Many thanks to the website.

Your Daily Mantra

1. The market pays you to be disciplined.
          The constant truth is discipline equals increased profits. Without discipline, you will put less money in your pocket.

2. Be disciplined 100 per cent of the time.
          If you trade with discipline nine out of ten trades, you cannot claim to be 100 per cent disciplined. This 10 per cent undisciplined trade will really hurt your overall performance. So discipline must be practiced on every trade.

3. Love to lose money.
Traders ask: What do you mean, love to lose money?
         What the rule means is that you are going to lose throughout your trading sessions. So, get out of your bad trade as soon as you realize you have made a wrong choice. This will save you a lot of trading capital and make you a better trader.

4. If your trade is not going anywhere in a given time frame, it is time to exit.
        This rule relates to the theory of capital flow. When there is price stagnation which happens often throughout a trading session, the market is telling us that they are happy with the prevailing bid and offer. You do not want to be in the market then and best to exit. It is a waste of time, capital and emotional energy. The market will heat up again and then you can re-enter the market with a new trade.

5. Never take a big loss, only a big loss can hurt you.
        Never put yourself in a position of losing more money than you can afford. You are not a ‘loser’ unless you do not get out of the losing trade once you know the trade is no longer good.
Big losses wipe out too many small winners you have worked hard for. It is also psychologically devastating when you lose big as it may take a long time to build up your confidence again. Then you are a loser.

My Notes: I again acknowledge Mr Barros as the writer of these excellent mantras. I try to follow all five of these. When I say that I follow all five of these mantras, it is not to go on any ego trip. It is to share with you the fact that traders can implement these rules in their trading plan, with a little bit of discipline. If I can do it, everyone can.

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