Trade with this in mind or buy a lottery ticket

Here’s a trade by list that gives me an edge. Not only in trading but in business too:

  • Know the rules and follow them
  • Don’t lose money
  • Make a little money
  • Make a lot of money

Know the rules: good management is the same. One of the primary things that my bank manager looks for, before he will loan to my business, is a management team that knows and follows the rules. This is as important to him, if not more so, than the underlying value of the loaned against asset. In trading it is no different, management of the rules and strategies needs to be clear and followed.

Don’t lose money: very obvious in hindsight. But in the heat of a trade, patience is not always the first thing that comes to mind. Patience is essential, but not to the point of paralysis. The oxymoron is that losing money is part of trading. After all, trading is a 60% certainty at best. The important thing here is only lose what we judge comfortable to lose. If we lose more than what is comfortable then refer immediately to ‘know the rules’.

Make a little money: if we work hard to make small amounts of money in trading then the big stuff will come eventually. If we find ourselves passing this part and going straight to ‘make a lot of money’ bit, then we need to quickly refer back to ‘don’t lose money’.

Make a lot of money: this happens automatically if we do the first three consistently. It doesn’t happen any other way unless we find ourselves with a lucky lottery ticket.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s