2 Rules that every trader should follow
There are only 2 rules you need to follow while trading – I will mention those at the end of this article. To really understand those rules first you need to understand what you mean by stock or FOREX market.
The market, the monster
You need to understand market does not care. It is a dubious monster always ready to devour you. This is true and you might have often felt why the trades go into loss the moment you take them? Do you think this happens to only you? No my friend, It happens to almost all retail traders. This gives you nightmares and you are afraid to get into trading again. Just like me.
Let us take a closer look
Here I am not going to get into technical and fundamentals of the market, but the naked truth. The market is played by the big players and they decide the future of a stock or a forex pair. They play on the basis of inside information which we are denied to get. What are left over to play are the bits and pieces that these heavy duty underwriters throw from their tables. Now to a retail trader who is looking for a second income should fight with others to get a winning trade. There is no point in breaking your head understanding he market. It goes where it is programmed to go and we just try to bite a chunk out of this slithering snake.
But it usually slither away biting us back.
What to do?
You cannot be a friend to the market nor can you pet it. It is a monster. Be it any market it doesn’t matter. All you can do is avoid being bitten and scared to death. Usually a retail trader just does not know where to enter and exit. He gambles and please don’t tell me you are the master of market just because you understand some numbers and my friend; that is the trap it lays out for you to die. We call it a less provocative and professional term called ‘speculation’.
How to kill the market?
Find the right spot and hit it hard. A retail trader tries to hit this monster where ever possible and gets bitten. You need to find those right spots. In this case the right BUY and SELL points. Find it and you are hitting at the right spot which bleeds the monster. Let me say this in trader’s language. If you take a buy in the sell area of a stock or Currency pair you bleed. Similarly if you take a sell in the buy area you bleed. You need to know the correct exit points too. You do that get your share and retire for the day and come back rejuvenated to hit it again the next day because no matter how the market bleeds it is going to revamp and comeback healthier like phoenix bird the next day.
How to do that?
Buy getting a right kind of trade support system that identifies the accurate buy and sell areas.
So what are the rules?
Plain and simple
RULE NO 1
The market is always right
RULE NO 2
When in doubt, refer rule no 1
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