I have to admit that I was not strong enough to invent these fairly simple rules of trade. Great trader gave them to me some 15 years ago. However, I'll tell you - they work. If you follow those rules, breaking them as sparingly as possible, then you will make money year after year, sometimes better, sometimes worse, but you will make money. The rules are simple - to comply with the rules is difficult.
Old, but good rules
If I have something to learn for their 17 years of trade, it is that simple methods work best. Those who rely on a set of technical tools, such as Stochastics, moving averages, Fibonacci numbers, etc., are usually aware that their head is filled with such a huge number of different information that they can not take a rational decision. One technique shows to buy, the other - to sell. A third said - waited, while the fourth points to the need to add to positions. This sounds like a stamp, but simple methods work best.
1. The first and most important rule - bychi markets tend to be long-term. This may sound obvious, but many of us have sold in the first rally in a bull market, saying that the market was moving far too long and too fast. I've done it before, and I suspect that I was ever in the future will make this again. Thus, we have increased profits, which was to grow because of our initial long position, but actually losing money, getting up in the short position. At the bull market can only be in a long position or out of the game. Remember, the lack of position - is also a position.
2. Buy the market-based instruments that show the force and sell those that show weakness. The public continues to buy when prices fell. Professional buying when prices recovered. This distinction may sound illogical, but the purchase, with an increase in work. Rule survival is not to "buy low, sell high" but to "buy higher and sell higher." In addition, when comparing the different marketing tools, buy only the strongest, and sell the weakest.
3. In the transaction, enter into it as if it has the potential to be the largest transaction year. Do not make a deal until you are well it is not designed, the plan should be designed so that adding to positions in the case of positive developments in and out of the deal with unforeseen circumstances.
4. On minor corrections against the major trend should strengthen the position. In bull markets, add to positions in the minor setback to the level of support. In bear markets, add in the correction to the level of resistance. Use the level of recovery in 33-50% of the previous movement or the respective sliding average as the first level to build positions.
5. Be patient. If the transaction is omitted, wait for correction to enter the market.
6. Be patient. Once the position is open, give it time to grow and create profits for which you are expected.
7. Be patient. The old adage that "you never bust, taking profit" is probably the most useless advice ever data. Taking small profits - this is the right way to end waste, because a small profit will never become a big income. The real money in the trade are made in one, two or three large transactions that occur each year. You should be able to patiently hold the winning position, to enable it to develop in this type of transaction.
8. Be patient. Once the position is open, give it time to work, give it time to insulate itself from random noise, give it time so that others can see what you were before them.
9. Be impatient. As always, small losses and rapid loss - this is the best loss. This is not a loss of money, which are important. Rather, it is the preservation of intellectual capital, which would be spent, when you sit with a losing position, which is important.
10.Nikogda, under any circumstances, do not add to a losing position, and not "average" position. If you are buying, then each new purchase must be at a higher price than the previous one. If you're selling, then each new selling price must be lower than the previous price. This rule shall be adhered to strictly.
11. Do more of what works and less of what does not work. Every day, look at their positions and try to add items that are generating the most revenue with the diminution of the entries, which are unprofitable or less show a profit. This is at the heart of the old proverb - "let your profits grow."
12. Not included in the trade until the technical analysis and fundamental data are not consistent. This rule makes pure technical analysts poezhivatsya. But it can not be helped. I will not sell until I am confident that the simple technical rules that I follow, and my basic research, are in tandem. Then I can act with full confidence.
13.Kogda there are significant losses, take time out. Close all transactions and halt trading in a few days. Subconscious can play with you malevolent joke after large, rapid losses. The desire to "return the money" is very strong, but he should not succumb to.
14. With a good trade, a little increase. All we have such enormous periods of time when all our deals profitable. When this happens, deal aggressively and more - strike while the iron is hot.
15. Adding to the position, add only 1 / 4 to 1 / 2 from the current position. That is, if you have 4 open lot at the next level, add no more than 1 or 2 lots. This moves the average price of your position less than half the price movements, thus allowing a 50% correction of the first not to touch your average.
16. To struggle to be on the side of the strong. We want to be on the side of those who win, do not waste our time and money on futile attempts to buy or sell at least at the maximum of some market movement. Our responsibility is to earn profit, while next to the victors. If neither side wins, we should not fight.
17. Markets form their tops, with a strong boom and form their own gutter still.
18. Last 10% of the bovine market will usually cover 50% or more of the total price movement. Thus, the first 50% of price movement will take 90% of the time and will be much more difficult to trade than the last 50%.
There is nothing "genius" in these rules. They are simply common sense and nothing else, but as Walter said, - "Common sense uncommonly. Trade - a business sense. When we trade contrary to common sense, then we lose. Maybe not always, but many, and eventually, everything. Trading is simple. Avoid complex methodologies associated with the uncertain technology systems and deal only in accordance with the main trend.
stockcharts.com
No comments:
Post a Comment