Top 5 Rules for Successful Trading

Rule 1: Always Use a Trading Plan

A trading plan is a set of rules that specifies a trader’s entry, exit, and money management criteria for every purchase.

With today’s technology, test a trading idea before risking real money. Known as backtesting, this practice allows you to apply your trading idea using historical data and determine if it is viable. Once a plan has been developed and backtesting shows good results, the plan can be used in real trading.

The key here is to stick to the plan. Taking trades outside of the trading plan, even if they turn out to be winners, is considered poor strategy.

Rule 2: Treat Trading Like a Business

To be successful, you must approach trading as a full or part-time business, not as a hobby or a job.

If it’s approached as a hobby, there is no real commitment to learning. If it’s a job, it can be frustrating because there is no regular paycheck.

Trading is a business and incurs expenses, losses, taxes, uncertainty, stress, and risk. As a trader, you are essentially a small business owner, and you must research and strategize to maximize your business’s potential.

Rule 3: Use EngineeringRobo AI to Your Advantage