My Trading Rules - My Football Trading

trading rules that i follow

Let's start with 5 signs that show you're still a novice investor (If you identify yourself with one of the 5 signs below I advise you to stop putting money on the markets!)

If you get sad that a trade doesn't go according to what you expected (A.K.A "red").

If that is your case it is always good to remember the words of Peter Lynch:

“In this business, if you’re good, you’re right six times out of ten. You’re never going to be right nine times out of ten.”

Just because a trade doesn’t go in the direction you expected doesn’t mean it won’t be profitable in the long run. You won’t get every trade “right”.

If your standard for determining the success of a trade is whether it was "green" or "red".

Warren Buffett, to determine whether a trade was good or bad, looks at the company, not the outcome of the trade. So, instead of looking at the outcome of the trade, look at the team you invested in.

If you trade 20 times a day it is a strong sign that you are a beginner and a crazy gambler!

Why? It is very unlikely if not impossible that there are 20 excellent trading opportunities in just 1 day.

If you feel afraid or fearful of having an opinion contrary to that of the market.

If you buy what everyone else buys, it is very likely that you are buying expensive. If you sell what everyone else is selling, you are probably selling cheap.

If you want to buy cheap, your only chance is to buy from the majority that is selling. And if you want to sell high, you have to sell to the majority who are buying.

Get used to it, if you want to be a value investor, your opinion will always be the opposite of the market’s.

If you hear a tip from someone and invest without having done your research.

Buying something or selling something just because someone says so only shows you are a beginner since an experienced investor knows in detail all the reasons that made him invest.

Five Affirmations for Traders

1.) I am patient and i let trading opportunities present themselves to me.

2.) I continuously monitor my susceptibility to making errors by keeping detailed logs for every trade I place.

3.) I fully accept mistakes and failures as part of my development and self-growth - they are just experiences that point the way. I am patient with myself when I inevitably make mistakes and experience failures.

4.) I am free from any attachment to money, outcomes, or being right. This, in turn, releases my capacity to perform to the best of my abilities in the markets.

5.) I believe unconditionally that markets are uncertain and unpredictable on a trade-by-trade basis. Therefore, I take a pragmatic and objective approach to them.

FIVE FUNDAMENTAL TRUTHS OF PROBABILISTIC MIND-SET

Anything can happen.

Regardless of how much time, effort, or money you’ve invested in your analysis, from the market’s perspecive there are no exceptions to this truth

You don't need to know what is going to happen next in order to make money.

Trading is a probability / numbers game. You don’t know the sequence of wins and losses or how much money the market is going to make available on the winning trades

There is a random distribution between wins and losses for any given set of variables that define an edge.

If every loss puts you that much closer to a win, you will be looking forward to the next occurence of your edge, ready and waiting to jump in without the slightest reservation or hesitation

An edge is nothing more than an indication of a higher probability of one thing happening over another.

Creating consistency requires that you completely accept that trading is not about hoping, wondering, or gathering evidence one way or the other to determine if the next trade is going to work. The only evidence you need to gather is whether your edge is present at any given moment.

Every moment in the market is unique.

There is nothing at the level of your rational experience that can tell you for sure that you “know” what will happen next. So why bother trying to “know”?

Setting up a trade

Define an edge

As an investor YOUR objective is not to find out who will win the match but whether chance of winning is x% or not.

Step 1

Trade entry

If the market is aligned in a way that conforms with the rigid variables of your edge, then you have a trade; if not, then you don't have a trade. Period! No other extraneous or random factors can enter into the equation

Step 2

Stop-Loss Exit

Your approach has to tell you exactly how much you need to risk to find out if the trade is going to work. It has to be absolutely exact, requiring no subjective decision making

Step 3

Taking Profits

Divide your position into thirds (or quarters) and scale out the position as the market moves in your favor. Set up a situation in which there is "risk-free opportunity". Do the best you can to pay yourself at reasonable profit levels when the market makes the money avialable.

Step 4

Accepting the Risk

Be as comfortable as possible with the dollar value of the risk you are taking

Step 5

Trade!

Trade your system exactly as you have designed it, no matter what! You cannot deviate, use or be influenced by any other extraneous factors

Step 6

I AM A CONSISTENT WINNER BECAUSE

I objectively identify my edges.

I predefine the risk of every trade.

I completely accept risk or I am willing to let go of the trade.

I act on my edges without reservation or hesitation.

I pay myself as the market makes money available to me.

I continually monitor my susceptibility for making errors.

WORDS OF WARNING

(investment language that spell trouble)

"the opportunity of a lifetime"

"guaranteed"

"It's a sure thing"

"our proprietary computer model"

"It's no brainer"

"Don't you want to be rich?"

"can't lose"

"The upside is huge"

"Trust me"

I understand the absolute necessity of these principles of consistent success and, therefore, I never violate them!

FootieTrader

MyFootballTrading Admin