My Trading Rules
I shall follow and am following this STRICTLY.
- Risk control
Do not touch any risky assets (e.g. futures, junk bonds, stock options) when I can not afford losing 100%.
Maintain a low-risk or risk-free cash reserve to prepare for the worst situations, such as losing all my investments and my job in a market crash. The reserve should be sufficient to provide food and a shelter for me for at least one year, and have the ability to recover after the worst is over.
For stocks, give up any position immediately after it reaches 10% loss. For stock day-trading, stop loss at 5% unless the stock worths holding for more than one month.
For other riskier assets, see #1.
- No greediness
Remember: not making money is better than losing money. Cash is a position.
- Not gambling
Trade consciously and logically. Have reasons before sending order.
Do not trade when I’m not feeling alright. NO TRADING except stop-loss when I am depressed, badly sick or under influence of alcohol or drug.