Unveiling the Trading Rules of Professional Traders: Key Insights and Strategies

By | June 28, 2023 4:04 pm

Amateur Versus Professional Stock Trader

Rules are what separate a day trader from a professional trader. The only good time to break a rule is never. Barriers are made to be broken not rules, you can have one or the other not both.

The most important rule.

A trader must create their own rules. They know themselves the best. The rule that cannot ever be broken is losing more than limit down ie. Once you have lost X amount on a particular day no further trade to be taken.

Breaking Rule, What it tells about trader?
Breaking the limit down rule reveals everything. It reveals you cannot accept loss, can’t see the big picture, do not understand the economics of trading, and do not believe you will be better tomorrow. There is nothing wrong with losing. A loss happens, two days or a week of losses should not happen in one day.

When professional traders break a rule.

“NEVER”. Breaking a rule reveals a bigger, more costly problem. Adjusting a rule mid trade is breaking a rule. If you feel as if your rules are not serving a purpose, change them for tomorrow. Rules are not made to be broken they are made to be adjusted as new information accrues.


The Real test of trader

Most traders can withstand a bad day; it is the second day that can ruin a trading career. After the first loss there is a tendency to be money blind. Who cares if I losing x amount, I loss x amount yesterday? That is an emotional thought. Remember the loss was more than they wanted to lose yesterday. As the losses on the second day your focus drifts.The focus drifts to a result and not the process. As the losses begin mount, reality sets in. Now the mind shifts from short term to long term. They start doing calendar math. Ok it is going to take me a week to make this back. Or I can make all back today. That is like saying I broke my leg, but I can still run as fast as ever. Maybe, but not likely.

How to avoid this scenario.

Easy, don’t break your limit down rule. If you feel like adjusting your limit down during the day; two things will happen. You will lose more or even worse you will make the money back. If you make the money back you will get what you perceive as a positive result. Hey rookie, that is borrowed money. Sacrificing short term gain for long term survival.

How to become a professional day trader?

Day trading is not an easiest job to do,There have been studies to prove that only 10% day traders actually make money. 7% of those day traders are breaking even and 3% are the traders that are actually making money.  Let me share my experience what qualities a trader require to be a professional day trader


Trade the quantity you are comfortable with , For example If you are comfortable in trading 10 lots that be with it. Do not compare yourself with your friend / colleagues who  regularly trades 100 or 200 lots per trade. Its possible you,  didnt possess the emotional or psychological skill set necessary to trade such big size. Thats OK.

Traders should know their comfort zone Typically, if trader goes above his comfort zone that trade mostly end up in loss as Emotionally trader could not handle that size. The trade would inevitably turn into a loser.
Learn to accept your comfort zone as it relates to trade size. You are who you are.


Trade Your Stratergy Instead of The Market

Anyone can take Stratergy  away from you, no one can take away a true understanding of the market

This is the sole reason why I try to teach all my traders involved in the training program how to understand how the market works. All indicators that are available today are lagging, in other words, indicators react to price.

We trade the market not indicators

So why would you put together fancy colors in order to hide what’s really important? Take off the rainbow from your charts and start paying attention to wants important, the market. There are no magic indicators, fancy bright lines, or arrows to tell you when to get in and out, that is going to replace a true understanding of the market.

Never trade Without A Plan

Day trading isn’t that difficult; buy a decent laptop, pay a guru for some training, and voilah! Your making money day trading.

In order to make money in the stock market we have to think analytically. It is harder to think analytically when money is involved. We all work hard for our money and most of us had to work sweat and tears for it, to risk it and lose it the stock market hits home for everyone.

When you anticipate what the market is going to do you are prepared for anything the market can throw at you. The ability no, the feeling and ease that arises from knowing that you are prepared for any situation puts our emotions at bay.

If you are ready you know how to react, if you know how to react you know you will lose only a minimal amount of money. If you are know you are only going to lose a minimal amount of money you will only lose a fraction of what you could when day trading.

Be prepared for anything, don’t react to the market.

The Misleading Notion That You Need To Make A millions
Stock market is a perfect way to lose millions of hard earned money in matter of days but to make millions will take lots lots of time. It requires you to be perfect is all 3 aspect of trading ie. Mind, Method and Money. You miss one and market will Kick you out of market. Get rich slowly but with consistency.

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