Thursday, August 18, 2011

Trading Rules From A Wall Street's Legend (W.D Gann)

    * Never risk more than 10% of your trading capital in a single trade.
    * Always use stop-loss orders.
    * Never overtrade.
    * Never let a profit run into a loss.
    * Don 't enter a trade if you are unsure of the trend. Never buck the trend.
    * When in doubt, get out, and don't get in when in doubt.
    * Only trade active markets.
    * Distribute your risk equally among different markets.
    * Never limit your orders. Trade at the market.
    * Don't close trades without a good reason.
    * Extra monies from successful trades should be placed in a separate account.
    * Never trade to scalp a profit.
    * Never average a loss.
    * Never get out of the market because you have lost patience or get in because you are anxious from waiting.
    * Avoid taking small profits and large losses.
    * Never cancel a stop loss after you have placed the trade.
    * Avoid getting in and out of the market too often.
    * Be willing to make money from both sides of the market.
    * Never buy or sell just because the price is low or high.
    * Pyramiding should be accomplished once it has crossed resistance levels and broken zones of distribution.
    * Pyramid issues that have a strong trend.
    * Never hedge a losing position.
    * Never change your position without a good reason.
    * Avoid trading after long periods of success or failure.
    * Don't try to guess tops or bottoms.
    * Don't follow a blind man's advice.
    * Reduce trading after the first loss; never increase.
    * Avoid getting in wrong and out wrong; or getting in right and out wrong. This is making a double mistake.

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