These are rules to trading written by me, outside of the last ones provided in the image below, check them out if you’d like.
Rule 1: Understand that the market is rigged heavily by hedge funds and market makers. What’s a Hedge Fund or market maker? Check out out our Discord chat to learn more.
Rule 2: Understand that INVESTING and DAY TRADING are both equally as risky, especially if you’re just going BLIND into trades. You can have the “all in mentality” if you’re just playing with a small amount of money or money you are ok with losing 100% but I STRONGLY recommend you paper trade first. Paper trading essentially means you virtually trade with REAL market pricing.
Rule 3: PENNY STOCKS are heavily manipulated and can be dangerous to your PORTFOLIO. Make sure when doing penny stocks that if you aren’t sure what you’re doing to do some POSITION SIZING to make sure as to not destroy your portfolio. Invest and diversify into unique sectors or only small portions of your entire portfolio. Just because you win big ONCE doesn’t mean you will again and odds are actually in your favor against it.
Rule 4: Just because someone SUGGESTS a stock doesn’t mean you should play EVERY stock they mention, do your DUE DILLIGENCE and play carefully. Make sure you understand the play and it’s benefit.
Rule 5: UNDERSTAND the benefits of institutional holdings(big institutions that hold shares for a company.) being high in a given company, they’re a key way that hedge funds and market makers make sure they control the stock in the way THEY want it to go. They won’t bother much if the FUNDAMENTALS are terrible, but if they’re good for LONG-TERM, you’re good for huge profitability long-term. There will always be greed, accumulation and distribution in the short run.
Rule 6: STOCKS DO NOT WAIT FOR YOU. Make sure you have your entry/exit, and plan of action down BEFORE playing a stock. Refine at least one method to trade with. For example in my case I focus on short sale restriction stocks, downgrade stocks, and obvious volatility dips on value stocks.
Rule 7: VERY IMPORTANT. You will NOT always win. You’re investing your money with those that have BILLIONS of dollars. BILLIONS. With the control they have you’re at their whim. Take the time to look up things like the “Bloomberg Terminal” to learn more about the level of control these peeps have.
Rule 8: UNDERSTAND the value of a stock, and realize that if it goes up 20%, 50%, 100%, 200% or more in a day, you’re likely CHASING. almost ALL stocks that run up this much in a day crumble.. VERY quickly. It’s a rarity that they server a continuation longer than a two to three day span.
Rule 9: REALIZE the impact of your position and the RISK you take buying it and that although it seemingly won’t be impactful learn what a STOP LOSS is and a TRAILING STOP LOSS is just in case, understand as much as possible the potential risk for profit you’re taking and know BEFORE you enter a position where your cut-off line is.
Source material of GOLDEN rules of trading. No, not created by me but there is some good rules to learn.