1. Don’t trust others opinions – It’s your money at stake, not theirs. Do your own analysis, regardless of the information source.

2. Don’t break your rules – You made them for tough situations, just like the one you’re probably in right now.

3. Don’t try to get even – Trading is never a game of catch-up. Every position must stand on its merits. Take your loss with composure, and take the next trade with absolute discipline.

4. Don’t believe in a company – Trading is not investment. Remember the charts and forget the press releases.

5. Don’t seek the Holy Grail – There is no secret trading formula, other than solid risk management. So stop looking for it.

6. Don’t forget your discipline – Learning the basics is easy. Most traders fail due to a lack of discipline, not a lack of knowledge.

7.Don’t trade over your head – Concentrate on playing the game well, and don’t worry about making money.

8.Don’t chase the crowd – Listen to the beat of your own drummer. By the time the crowd acts, you’re probably too late…or too early.

9.Don’t trade the obvious – The prettiest patterns set up the most painful losses. If it looks too good to be true, it probably is.

10.Don’t ignore the warning signs – Big losses rarely come without warning. Don’t wait for a lifeboat to abandon a sinking ship.

11.Don’t count your chickens – Profits aren’t booked until the trade is closed. The market gives and the market takes away with great fury.

12.Don’t forget the plan – Remember the reasons you took the trade in the first place, and don’t get blinded by volatility.

13.Don’t join a group – Trading is not a team sport. Avoid acting on messages, flashes and financial TV. Your judgment may be more correct than all of them put together

14.Don’t have a paycheck mentality – You don’t deserve anything for all of your hard work. The market only pays off when you’re right, and when your timing is really, really
good.

15.Don’t ignore your intuition – Respect the little voice that tells you what to do, and what to avoid. That’s the voice of the winner trying to get into your thick head.

16.Don’t hate losing – Expect to win and lose with great regularity. Expect the losing to teach you more about winning, than the winning itself.

17.Don’t fall into the complexity trap – A well-trained eye is more effective than a stack of indicators. Some time Common sense is more valuable than a complex set of indications.

18.Don’t confuse execution with opportunity – Overpriced software won’t help you trade like a pro. Pretty colors and flashing lights make you a faster trader, not a better one.

19.Don’t project your personal life – The outcome of your trade is definitely likely to get affected by the situation at your home. Get your own house in order before playing the markets.

20. Don’t think its entertainment – Trading should be boring most of the time, just like the real job you have right now.

If one could sum up the single most important aspect of successful trading it would be to stick with the trend as much as possible.

“The Trend is your friend until the end when it bends.” Anonymous

If you have been around trading for any time at all you’ve probably encountered that quotation a thousand times by now. But in all those times have you ever really tried to understand what this well worn expression is saying to you?

Whoever was the first to say, it knew the secret to making money in the markets. Trading with trend is not just another axiom that rolls off the lips of traders, but it is the very core of successful trading. As almost any successful trader will tell you, there are infinitely better opportunities to trade with the trend then against it.

So, if it is such a commonly accepted truism among traders that the best way to make money in the markets is by trading with the trend, why is it that so many traders chose to take positions against the predominant market direction?

I suppose one reason is that within each of us is a rebel. It is part of human nature to go against the *crowd*. Our society embraces individualism and as a result everyone strives to be an individual. Sometimes this is interpreted as doing the opposite as everyone else. There is something romantic about being the underdog. Everyone roots for the underdog. Traders have even coined the term *contrarian* to describe the strategy of trading against the trend.

Now does that mean that you will never lose money by trading with the trend? Of course not! Every trend ends and reverses eventually which will stop you out. Furthermore markets make regular pullbacks as a part of an ongoing trend which could stop you out prematurely. You should always trade with the trend until it hurts. You should follow the trend until you can not possibly conceive how the market could go any higher/lower. And then you should trade with the trend some more. One must Paper trade it. I think you’ll be pleased with the results. One of the things that the majority of folks find most challenging about trading is determining which is more important: a good entry or a good exit?

As has been pointed out so many times before, the three components of good trading are market analysis, money management and mental attitude.

As every experienced trader knows, market analysis is the easiest part to learn. However, that by itself only turns you into a good PAPER trader!

There is a world of difference between paper trading and real trading. And the difference is the emotional impact trading has on us, when we trade with real money.

Emotions make a trader hang on to a losing trade, because he has the hope that the market will turn around and get him back to break-even, causing him to ride a bad trade into oblivion. Emotions will keep a trader out of entering a perfectly good trade, because he is afraid of this being a losing trade.

Emotions make a trader exit a good trade, right after he entered, because the normal jiggles in price make him doubtful of his analysis and afraid of losing on this trade, thus making him miss out on what could be a long ride.

Trades are rarely entered at the low point of a V-shaped bottom. The great majority of our trade entries are followed by some form of ‘chop’, right after entry. This applies to both position trades and day trades. The time frames may be different (days, in case of a position trade, and minutes, in case of a day-trade), but the principle is the same:
What looked like a perfectly well thought-out trade before the order was placed can turn into a struggle with fear and doubt.

Once these emotions surface, it becomes difficult to stick with the original plan. Many traders then take the easy way out, by escaping to the safety of being on the side lines. And there goes another good trade without them!

A carelessly placed entry almost always results in such misery. On the other hand, take those incidences when a buy was made right at the low. What a nice and relaxed feeling, when the market goes in the right direction immediately after entry! So what, if there are some wiggles! There is a profit, even if it’s only a small profit. Now it is
so much easier to keep a cool head and make the right decision. Therefore, it is my belief that a trader should strive to perfect his entry techniques first, and worry about the exit later on.

Here are some tips for the newcomer, aimed at relieving trading-stress:
Use stops! Many traders trade without stops. They argue that they don’t need to place stop loss orders because they are closely monitoring the market.

This may be so, but the intense monitoring required, and the ever present possibility of a quick adverse price move, create unnecessary additional stress. A well placed stop can do a lot to relieve the tension associated with a new position.

Keep your positions small! Many newcomers try to make a quick killing by using positions that are too large for their account, or trading a stock that’s too volatile for them. A sure way to increase the stress level!

Accept yourself for what you are! There are many ways to trade the markets. But we all have different personalities, and many trading styles simply don’t fi t our personality and emotional set-up.

Some people are natural long-term investors; some people are natural day-traders. Find out what suits you best, and then throw away those books that try to turn you into a person you can never be.