There are some basic formula's which a trader or investor should always keep in his/her mind before making any trading or investment decision which are as following:
1) A Simple Trading System.
2) Risk to reward as per person trading/investment style.
3) A well planned money management system.
4) Realistic expectation's.
5) Discipline to follow his plan religiously.
6) Learn to take losses as part of the business not as a punishment or guilt because they will be always there.
7) Don't need to over analyze his trading system, trading plan but there is significant need to keep it simple.
8) Don't try to fight the market because market is always right.
9) Don't try to find a rational behind a particular trade or investment because markets are rational but not the participants.
10) Shouldn't change his trading plan as every now and then.
11) Never take other people advice for a trade/investment decision.
12) Accept the responsibilty for every loss and profit.
13)Need to educate himself about the market in regular intervals.
14) Should stop looking for a Holy Graill.
15) Should never and ever add to a losing positon in any case.
16) Price is a reality and everything else is a big lie.
17) Market will go in cycles so there will always be a uptrend after a downtrend and vice versa.
18) Do not try to find out bottom and a top.
19) Shouldn't rush into a trading/investment decision.
20) Nothing new will ever happen in the market. History will keep repeating itself with a different name, symbol, jargon, reason, cause, event and people.
1) A Simple Trading System.
2) Risk to reward as per person trading/investment style.
3) A well planned money management system.
4) Realistic expectation's.
5) Discipline to follow his plan religiously.
6) Learn to take losses as part of the business not as a punishment or guilt because they will be always there.
7) Don't need to over analyze his trading system, trading plan but there is significant need to keep it simple.
8) Don't try to fight the market because market is always right.
9) Don't try to find a rational behind a particular trade or investment because markets are rational but not the participants.
10) Shouldn't change his trading plan as every now and then.
11) Never take other people advice for a trade/investment decision.
12) Accept the responsibilty for every loss and profit.
13)Need to educate himself about the market in regular intervals.
14) Should stop looking for a Holy Graill.
15) Should never and ever add to a losing positon in any case.
16) Price is a reality and everything else is a big lie.
17) Market will go in cycles so there will always be a uptrend after a downtrend and vice versa.
18) Do not try to find out bottom and a top.
19) Shouldn't rush into a trading/investment decision.
20) Nothing new will ever happen in the market. History will keep repeating itself with a different name, symbol, jargon, reason, cause, event and people.