You should be careful when finding stocks on the market. You have to use a number of stock market trading rules if you want to improve your chances of making money. You might end up being more likely to lose that money if you don't follow your rules.
Here are ten of the best stock market trading rules that you need to follow. These should always be read before you start your trading day and again when it ends.
1. Always follow your rules.
Some people think that they can break their rules once in a while just to change things. You have to be disciplined enough to stay within the boundaries of your rules.
2. Don't use three percent or more of your portfolio value on one trade.
You should keep from spending more money on your trades than what you really have to. Keeping your total portfolio protected is a real necessity.
3. Always cut your losses between 5 to 15% whenever you make the wrong decision.
You have to create set to stop loss limits on your stocks so you can keep from losing more money than necessary. You need to protect your money from further losses.
4. Don't use price targets.
You have to let any profits that you might experience move forward naturally. A good idea will be to give back some profits in order to get larger profits later on after a while. Remember, you are more likely to get more money if you focus on the biggest moves that might come once in a while.
5. Focus on just one style.
Using one simple trading style is the right thing to do. You can't just use multiple styles or you will lose track of what you want to do.
6. Concentrate on price and volume factors.
You should listen more to how the prices and volumes of stocks might change after a while. This includes taking a look at how these values might adjust what you get out of such a stock. Don't pay attention to outside opinions that relate to whatever you want to trade or what you currently do trade for that matter.
7. Take any entry signals that are worth your time.
You should always take in the entry signals that you have set up. You shouldn't ignore them no matter what you might think about them.
8. Don't stick to intra-day information for your trades.
Your intra-day data should be analyzed carefully when finding information relating to a stock. The fact is that stock prices can change within a single day. You can't just use intra-day information to see if a stock is worthwhile for weeks or months.
9. Don't be afraid to stop after a while.
You have to take breaks once in a while everyday. You will stress yourself out if you don't do this.
10. Try and be above average.
The final rule is to avoid trying to be the world's greatest trader. You just have to focus on being above average. You should think about how you follow your methods and the other rules instead of trying to be extraordinary among all the other traders out there.