Rules of the Game.

The #DREAMTEAM decided to put together a few rules of trading based on our experiences.

Rule #1: Do not over or under estimate anyone or anything

Participants and other traders can be anyone including professional traders, retirees, executives, teachers, small business owners, students etc. It is important to never underestimate anyone or anything that happens in the market.

Rule #2: Knowledge is power

It is important for all types or traders to understand basic trading procedures and tools before trading. This information includes placing a trade, using your trading software and monitoring your trade plans. It is also important to have a basic understanding of how to interpret company financials, reports and charts. Watch lists are great tools for staying organized and keeping track of the latest information. Remember, an informed decision is a better decision.

Rule #3: Be Realistic

Not all trades will play out as lotto trades, and not every trade will give you large profits. Therefore it is important to be realistic with your trades and your trade plans. Remember to keep profits and decent gains because it is better to settle for smaller profits then lose it all. Also keep in mind that it is okay to lose out on an opportunity, if you need to you can always buy back in on the dip. Build your confidence with small profits as this will give you opportunities to try different trading strategies.

Rule #4: Remember your limits when Margin Trading

Trading on margin means that you are borrowing money from a brokerage or trading firm to trade. Margins can amplify trading results, profits and losses so make sure you maintain control and trade with money “on hand.” You might want to start off trading without using margin until you feel more comfortable.

Rule #5: Always have a trade plan

Trade plans are very important. They include setting your entry and exit points before going into a trade. Do not wing it, especially if you are a new trader. A trade plan helps maximize profits and cutting your losses

Rule #6: Stay Focused

Do not over do it as you may lose track of entry and exit opportunities and your trade plan. It is important for new traders to start trading 1-2 stocks during a trading session. This will helps keep track of your trades and will allow you to find opportunities.

Rule #7: Timing is everything

Price Volatility changes throughout the day. Investors and traders begin to execute orders right when the market opens at 9:30am and this is usually the most volatile time of the trading day. Experienced traders may be able to pick up on patterns and trend at this times. New traders may need to watch the market without jumping in for the first 15-20 minutes until they gain more experience and comfort.

Rule #8: Designate your funds

Just like everything else, moderation is key. It is important to ensure you are trading responsibly and in moderation. Set aside a surplus amount of funds that you can trade with and are prepared to lose in case a trade does not go well. It is very important to make sure you have money set aside for your basic living expenses.

Rule #9: Be careful who you trust

The internet is full of false and misleading advertising. It is important that you are extremely cautios with SMS messages, mail advertising and newletters that promise enormous profits. It is important for you to avoid getting tricked and be aware that many, many deceptive websites exist.

Rule #10: Trade with logic not emotion

As a trader, your nerves will be tested. It is important to manage your confidence, greed, hope and fears. If you can control your emotions, you will be more successful. New traders may want to practice with virtual trading or paper money before making real trades.

#HappyTrading #DreamNation!

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