19 Trading Rules

Master the 19 trading rules to enter and exit your transactions confidently no matter what market condition you are in to maintain your portfolio performance.

1. Exit Smart with Big Positions - When you are trading large sizes, you need to exit when the market allows, not when you want to exit. For example, if there are "buy orders" just above a key level, sell half your position before that level and let the rest run beyond the point.
2. Avoid Overconfidence & Overtrading – You don’t trade too many times. Winning is not just the number of transactions you make—it’s about risk management.
3. Cut Losses, Let Winners Run – If a trade goes against you, you need to exit. If it’s working, you can stay in.
4. Reduce Position Size When Losing – If you’re on a losing streak, you need to reduce the size of your position strategically. That way, your worst trading days have the smallest impact.
5. Never Average Down on Losing Trades – Adding to a losing trade worsens things. Just exit your trade.
6. Trade More When Winning, Trade Less When Losing – Increase size only when you’re doing well; decrease when struggling.
7. Avoid Uncontrollable Risks – Don’t gamble on big news events. You only trade when you have an edge.
8. Exit If You’re Uncomfortable – If a losing trade stresses you out, you better close it. You can always re-enter later.
9. Forget Your Entry Price – What matters is whether you’re still bullish or bearish today—not where you bought/sold.
10. Focus on Defense, Not Offense – Always assume your trades could be wrong. Know your stop-loss points to limit losses.
11. Stay Humble – Never think you’re invincible. Overconfidence always kills traders.
12. Be a Market Opportunist – Test your ideas with small risks until your trading is proven right or wrong.
13. Big Money Is Made at Market Turns – While most people chase trends, on the other hand, catching reversals can be more profitable.
14. Markets Collapse Faster Than They Rise – A decade’s gains can vanish in days. You must perform risk management.
15. Don’t Fight Big Moves – If a quiet market suddenly surges, don’t bet against it—it’s likely starting a strong trend.
16. Use Time Stops – If a trade isn’t working as expected, you need to exit it—even if you’re not losing money yet.
17. Protect Capital First – Focus more on not losing our money than making money.
18. Trade with the Trend – The trend is your friend—align with the dominant market direction.
19. Utilize a 200-Day Moving Average – It’s a key indicator for long-term trends.

It is impossible to predict precisely where the market will do even after collecting hundreds of years of sufficient inforamtion on corporate finances and micro/ macro economy from the past  We just do not know what will happen in the future.  In the world of stocks and commodity trading, following a strict set of trading rules is paramount and not only helps you to become a profitable trader but also prevents you from losing in trading. These guidelines serve as the foundation for successful trading strategies and can help investors navigate the complexities of the financial markets with confidence and precision.