Every aspiring trader requires a set of rules and groundwork on which their trading activities will be based on. So, each one of them should spend considerable time and effort to frame out such rules to build the foundation that can help them to conduct the trading on the business lines. The right and consistent implementation of these basic ingredients has revolutionized the life of many traders today as well as in past. These rules will ensure trader and investors safety in the market by avoiding trading mistakes due to human weaknesses to help keep them financially alive in the markets forever. Some of these rules might be applicable only to traders but more or less they can be applied to investing as well as trading.


Never Trade on Hope, Fear, News & Rumor

Every trading decisions should be based entirely on the pre-defined rules, parameters and setups. Investors and traders should take utmost concern while entering into a trade as if any trade which is based on any unknown reason will lead to – Losses. Many traders ask for recommendations and opinions of experts on news channels about a losing position in a stock that they have entered into. They should understand that if they would like to do this as a business then they should know well in advance why they are entering a trade or investing in a stock and not later. So, always do your research before you enter the trade and not after that.

Always enter or exit a trade only based on your pre evaluated and verified parameters. Understand the working and mechanism of the markets and do actually news or rumors can provide your positive trading results. Markets move on a principle of discounting so you may not know how it will react on some specific positive or negative news as markets can even fall on a good news if it has already rallied before the news actually broke out. Markets discounts and adjust in the price movement all the information available with all the diverse market participants well in advance i.e. it discounting the future events.

A trader`s or investors job is to evaluate whether these events are already discounted or not. Trading and investing in Your Way will help you be in-sync and safe in the markets. This can only be ensured by taking a good care of strictly following your trading plan – Your Entry & exit rules, stop losses, risk management rules etc.

“The reputable newspapers always try to print explanations for market movements. It is news. Their readers demand to know not only what happens in the stock market but why it happens.”

There are always reason for the changes and fluctuations but the tape does not concern itself why a stock move in certain way neither do I. The reason why a stock did something today may not be known for days or weeks or months.


Protect Your Capital & Profits

Capital is the only biggest important asset for a trader / investor and a great care must be taken during the initial trading days to protect your seed-up capital. Capital protection is not just a need for any trader but a necessity for long term survival and performance and the only way to guard your capital is by using stop losses. So, never ever break your risk management rules which will ensure your capital and profit protection.


Do not Over-trade

Always follow the maximum number of trade you are allowed to take in your trading plan. Over-trading is one of the culprit of success of traders which can turn your profitable account into losses and will increase trading cost. This is one if the biggest reason for losses for day traders especially futures trader. Whether it is profitable or losing trades, restrict yourself with number of trades.

Traders should prioritize to understand and learn more about human behavior and psychology that can help prevent them committing similar mistakes again and again otherwise people with snatch your money away from you and believe me they won`t feel bad at all.


We have outlined big list of 12 trading rules which can help trader be safe in the market forever. Do visit the article 12 Step-wise Trading Rules for New Traders to be Safe in the Market and tattoo on your arm that I will never ever break these Rules.