From the previous article, I mentioned 4 trading rules, no 1 – Always do market research, no 2 – Limit your trading size, no 3 – Give your trade a reason, no 4 – Set exit level. In part 2, I would like to share certain rules that I follow after I have entered the trade.Rule 5 – Never average out a losing position. If you are having a losing position, try to minimize the loss by cutting the number of position, never add on to it so that you average out each options price. Many people think that they can salvage the trade by adding on to average out each unit price, this is self deceiving, and you might end up doubling your loss easily. Do not hold on to the losing position, you can either cut the position size or accept the failure, move on to another trade quickly.Rule 6 – Always update yourself with the Economy Calendar. The financial market is always influenced by the economic event, for example, jobless claim, FED meeting, oil inventory, housing start, and etc. These are the regular report that will affect the overall financial market, therefore affects your decision of when… Read full this story
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