Trading Commandments


Trading is an art form.

1. Safety First

    - 1 to 3 risk/reward ratio

    - Exit once strategy fails, do not rely on hope

        limit loss to 3%

    - Loss is ok, boxers get hit

        mitigation is key, don't get knocked out

    - Stick to the plan

2. The Trend is Your Friend

    - Do not fight the trend

    - Focus on the long term market

        day trading is less affected by the long term market

    - The Golden Cross

        -

    - The Bearish Cross

        -

3. Chop is NOT an Indicator

    - Rely on patterns

4. Let The Trade Come To You

    - Wait for confirmations

    - Resist FOMO

    - Don't chase a trade

    - Control emotions and aggression

    - The first entry is rarely the best

5. A Bad Strategy is Better than No Strategy

    - A framework helps you learn

6. Aim Small, Miss Small

    - Take profits off the table while they are still there

7. The Meat of the Move

    - Do not worry about a perfect entry or exit

        sell into strength 

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FAQ

A risk/reward ratio of 1 to 3 is crucial as it helps traders manage potential losses while maximizing gains. This ensures that the potential reward justifies the risk taken.

Once a trading strategy fails, it's important to exit the position immediately rather than relying on hope. Limiting losses to 3% is a key strategy to mitigate risk.

This phrase emphasizes the importance of aligning your trades with the prevailing market trend. Fighting against the trend can lead to losses, so it's advisable to focus on long-term market movements.

Waiting for confirmations helps traders avoid impulsive decisions driven by fear of missing out (FOMO). It allows for more strategic entries based on reliable patterns.

Having a bad strategy is better than having no strategy at all, as it provides a framework for learning and improvement. It's essential to refine your approach over time.


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