Dave Landry’s Trading Rules

A dozen pieces of good trading advice fron Dave Landry at TradingMarkets.com:

1. Trade in a conceptually correct manner
Trading because Mars lines up with Venus might work occasionally, but there is no real basis for trading in this manner. Patterns you trade should make sense and have some sort of statistical edge. 

2. Trade small
Any ONE trade should NOT have a material impact on your life. ANY one loss should be viewed as an “expense”—no different from what you do in any other business.

3. Ignore the news
The news is irrelevant. It’s the reaction to the news that’s relevant.

4. Forget about logic—Don’t worry about the “whys”
Stocks trade on emotions–period. There often is no logic as to why a stock rises or falls.

5. Know YOUR Methodology
Each method will have its sweet spot.

6. Don’t deal in mediocrity
Pick the best and leave the rest.

7. Do NOTHING unless there is something to do!
Your performance is based on the good trades less the bad trades. By avoiding the markets in less-than-ideal conditions, you’ll have fewer bad trades hence, better performance!

8. Stack the odds in your favor: Market/Sector/Stock
Your odds will greatly improve if only trade when the market, sector, and stock are all trending in the same direction.

9. Let things work
Results in trading are often skewed—most of the gains come from a few big winners. Therefore, it’s crucial to catch these occasional homeruns.

10. Money management
Trade small, use stops, take partial profits when offered, trail stops.

11. Money management
Trade small, use stops, take partial profits when offered, trail stops.

12. Money management
Trade small, use stops, take partial profits when offered, trail stops.

 

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Source:
12 steps you can take to improve your trading
Dave Landry
TradingMarkets.com, March 1, 2006   4:20 PM ET
http://www.tradingmarkets.com/.site/Swingtrading/commentary/
dlstoutlook/02282006-49741.cfm

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