Wednesday, April 23, 2014

The 3M Rule

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It is called a 3M rule of trading. These are the simplest and most common word in the market, and also the roots for success.

1. Money
        Always trade with a capital which you can risk and can also provide a satisfactory returns. If you are using a capital which you cannot afford too loose, then you will keep fluctuating with your emotions. And if you are also not using enough capital for trading, then the outcome could be positive but not satisfactory.

2. Method
       We should prepare a proper trading method or a strategy for trading, back test it, and then follow it with discipline in our trading. If we are not trading with a method, then it is like, we are running on a road while closing our eyes. The discipline is the other parameter which is always used with method.

3. Mindset
      Mindset is the most important factor in successful trading, it means control of emotions & psychology. We should prepare our mind for draw downs, stop losses and accepting being wrong before trading,because they are part of trading. Otherwise, when anyone of these arises in trading we will start to overreact, get frustrated early, break the rules and hence loose the money in the end.

2 comments:

azeez said...

Good one.. Played with words .. Ppl can understand as per their perception

Tomy Xavier said...

Good One...And the real reality...