All of us Coaches at Tackle Trading were, at some point in our lives, newbies. Greenhorns. Rookies. Freshmen. It is the battlefield of the financial markets that turned us into veterans. The thick layer comes with experience. Comes with errors, thousands of them. We know our limits because we’ve got to the edge of chaos so many times. We dominated our fear, greed, hope, and despair although many times we felt overpowered and overwhelmed by them. However, we are Navy SEALs in our own craft: if it doesn’t suck, it’s not worth doing. This is our mantra.
At Tackle, we cultivate not only great respect towards the veterans that came way before us but also great respect for the newbies that came and are still coming after us.
A while ago, Solon Stephanou, one of our beloved Coaches, published an article narrating the story of his first year as a trader. In that article, Solon compiled his first year as a trader in 7 basic rules that we want to present for you.
Use them as a source of inspiration, guidance, support or as a base for your business’ strategic planning. Ignore them at your own peril.
Rule #1: Protect capital
The best way to make money is not to lose it in the first place. Once capital is needlessly lost, you have to work twice as hard to get it back.
Rule #2: Keep position sizes consistent
Keep max loss on positions the same and small.
Rule #3: Take profit when available
Trail stops and lock in profit. A winning trade can easily turn into a loser in a day and not recover.
Rule #4: Never ride trades to expiration
Take profits when available. A trade is not profitable until it is closed and you always assume some risk while the trade is open. If you ride to expiration, you don’t give your trades enough time to recover in case something unforeseen happens.
Rule #5: Less is more
Structure trades so that some of the max profit is sacrificed in order to increase the probability of success. This may likely earn you more money over the course of many trades.
Rule #6: Always leave room to hedge
Leave 10-20% of the entire portfolio free at any given time.
Rule #7: Think risk before profit
Veterans think risk before profit. Always control and minimize your risk.
Newbies help newbies. Veterans help newbies. Veterans help veterans. This is what our community is all about.
Knowledge, like love, is one thing that, once divided, multiplies.
Lemon juice, no sugar. Love trading, investing, building systems and user interfaces. When not trading, reading, writing stuff or playing guitar, I am either telling stories or dreaming.
Financial freedom is a journey
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