There Is Just One Single Rule

Beginner and experienced traders all struggle with one particular aspect on the execution of their plans. Plans mean nothing without proper execution on them. In fact, the difference between a successful trader and an unsuccessful one is all about it. In trading, what I consider the fastest route to success needs the following two steps to be performed in full before going live.

First of all, we need the greatest possible education (like the one offered by Warrior Trading) that is the fundamental milestone in any trading career. In this part of the journey, the information collected are available to anybody and are meant to be taught in a way that can be assimilated by all kind of individuals. Here is where a first whole set of rules are defined.

Then, since every one of us is unique, from this point on, tailoring and customization process come into play. This is critical because it defines the shape of the trader oneself actually is among different strategies and techniques. Key point is understanding what is that one set of skills that works best for oneself. During this phase, the rules from above are mostly filtered and refined, rather than created as brand new ones.

Too many traders do not give to each one of these macro-steps the same importance, which can be a costly mistake. Also, keep in mind that the second step never actually ends during the entire career but keeps getting readjusted over time to match both our own evolving abilities and psychological attitude as well as they need to be readapted for responding to the surrounding market conditions.

Four tips about your set of rules

So, have you already defined your own set of rules? If you’ve not done so yet, you’re missing out on something very important. Whether they written into a well detailed plan or just on some sticky notes glued on your laptop it doesn’t really matter. Just do it the way that’s best suitable for yourself.

What every set of rules should include is also arbitrary. Generally speaking though, they must include every technical aspect of your trading, including strategies, targets, stops and much more. Do not be greedy when it comes to rules definition because they will be the number one asset in the entire career.

Here are four tips to help you dealing with your rules:

• Always keep refining your own set of rules by adding new ones or removing the unnecessary ones, just make sure to put the new ones into some sort of “testing” period before consolidating those;
• Make sure those rules aren’t in conflict with each other, my suggestion here is to run some sort of assessment to determine their consistency from time to time. Other than running one serious self-audit once the set of rules get frozen for the first time, remember to keep on doing it when one rule gets modified;
• Find your way to exit from your comfort zone once you break one rule. The point here is not to punish yourself but rather to get the best lesson learned from it. One trader may run 5 miles, one another may go for countless push-ups. Even here the sky is the limit in terms of opportunities for doing so, find your own and enjoy the pain of the journey. Just make sure you choose something that lets you the possibility to think about what caused the problem in a way that a solution can be found;
• Leave always a space for deviations. This may sound kind of counterintuitive but let’s be honest, we all break rules from time to time. That’s why it’s very important to distinguish between a broken rule to one another. Because sometimes it can even be ok doing so, my only suggestion is just to leave an area where these deviations are contemplated and described.

In transforming a trader into a consistently profitable one, there is just one single rule. Respecting the rules.

“You don’t learn to walk by following rules. You learn by doing, and by falling over.” – Richard Branson

See you in chat room.

Trade safe,

Roberto Barbaro