12 Commandments PDF
Transcript of 12 Commandments PDF
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The 12 Commandments
Of Trading
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Today’s Agenda
Why Trader’s Fail
Review the 12 Commandments of Trading
Q&A
www.traderslaboratory.com
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Why Traders Fail
Trading System
MoneyManagement
Trade
Psychology
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I. Thou Shalt Treat Every Trade as a Single –
NOT a Home Run
• Too Excited about Winners
• Too Depressed about Losers
• Trading should never be treated as a Race or a
Marathon – It’s a long journey
• No One Trade Should Matter That Much in the “Grand
Scheme”
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II. Never Force a Trade – Take a Snapshot
• Never Get Overwhelmed into action for fear of missing a move• Don’t Speculate – Trade Only on 100% Confirmation of Your Trade
• Accept you’ll miss some moves in exchange for missing losses as
well
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III. Unplug…When It’s Time to Trade
• Turn of the Chat• Don’t Go to Blogs
• Turn off CNBC
• IM, Facebook, Twitter, Email
• News Analysis, Fundamentals, Rumors
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IV. Put the Odds in Your Favor on Every Trade
• Stack the Odds then Let the Market do its thing• You have zero influence on the outcome once tradeplaced
• There’s no…Hoping, Wishing, Praying or Crying inTrading
• Competence leads to Confidence• “It doesn’t matter whether you win or lose, it matters how
much you make when you’re right, and how much youlose when you’re wrong” George Soros
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V. Trade for Profit
• This should be your top reason for trading• This should be your mantra when you reach the 90% level on your
trades
• Don’t stumble over a few extra pips
• This should be the reason you follow the rules and avoid breaking
them
• “Greed is Good” only in the Movies
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VI. Check Your Ego at the Door
• You will be bruised and battered• You must accept your loss – EXIT – Move On
• Give up the need to be always right
• You can be wrong daily and a big winner
• Sorry, Nobody cares
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VII. Stop Making Excuses
• The Blame Game…• The Broker
• The System
• The Internet, Charting, Data
• Wife, Husband, the Dog, the weather, your bad luck, conspiracies
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VIII. Minimal Leverage = Maximized Success
• Most Trade Forex Opposite – Maximize Leverage = Wipeout &Refund Account Cycle
• 3.8 Wipeouts on Average/Account Holder
• 1% - 5% Maximum Risk…or less
• Futures, Options Similar
• Biggest accounts risk least, smallest want to risk the most…WHY?
• Understand the Three Legged Stool – System, Risk, Psychology
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IX. Follow The 25 Trade Test
• A “rites of passage”• Forces you to learn the rules
• Forces you to back-test (or face doing it in real-time with real
money)
• Forces you to experience wins, losses, trade for profits, near
misses, and most emotions
• You will master the system
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X. Always Have Success Mentors
• Learn on the Forums• Do the work, learn from proven traders
• Do watch the Videos, Read the Blog
• Do Attend training webinars (content)
• Consider One-on-One Coaching
• 10,000 Hour Rule “Ultra Fast”
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XI. Do Not Over Diversify in Forex
• Many Forex Markets Move in Tandem• Understand their underlying correlation
• It is not like trading stocks or managing a large portfolio
• 2-5 Markets Max is the Sweet Spot
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XII. Have Fun
• Making Money• Be Your Own Boss
• Double Business by Changing One Number
• Ultimate Challenge Mentally & Psychologically
• Freedom & Independence
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Questions & Answers
www.traderslaboratory.com
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