I have talked about money management and trading rules before. Now, instead of repeating the old things, here are some new things to consider.
Making trades vs taking profit
When making trades don't think about profit. Only think whether the certain trade would be a successful one. If you make the trade because you have a desire to make profit then it tends to become an emotional trade and that's not good. Rather, make the trade because your analysis show it would be a successful one, not because you want to make profit. I understand that when making a trade, we tend to think of both of them, but the question is - which is the bases of your decision - is it the desire to make profit or is is your analysis that this trade can be successful?
Trading hours and decision making
You should make your overall (long or intermediate term) decisions before the trading hours and you should not change your general overview of the market during trading hours. Look at the bigger picture.
Breaks & presents
Take breaks from trading, don't trade every day - after couple of weeks, make presents to yourself if you have been successful, go abroad or something like that. If you haven't made profit, just take a couple of days off.
Crowd is wrong
Don't follow the crowd, historically the public tends to be wrong. If everyone are buying, it might be good idea to start thinking of going short. If 85% of the market analysts are bullish, the market is most likely overbought, if less than 25% are bullish, it's probably oversold.
Bets are bad
Don't make bets. You don't have to make trades multiple times a day or even every day. Make trades only when you have a good reason to go into the trade. Wait for an opportunity. If in doubt about the trade you have done, reduce the size or get out of the trade.
Market orders - no, no
Don't make market order, instead make only specific limit orders (sometimes, only when you definitely want to get rid of the equity, then market order is ok).
Pay attention to "groups", stock groups of commodity groups and more specifically divergences among the group.
Trade the opening range breakout. A break out of the opening range may show the direction of trading for the next day or more. Also, trade the break out of the previous day's range. Buy only once the price is above previous day's close.
Don't enter your entire position at on price. If not trading very short term then first open a position, wait for confirmation and then add to the position. Note that you should never add to a losing position.
Losing positions should never be carried over the weekend.
That's it for now!