2. Have perspective: Always keep the risk-reward in the back of your head before entering. If your stop is 50 cents, and your goal is 50 cents most likely all you’ll ever do is churn your account. Try not to enter until your reward outweighs your risk by a minimum margin of 2. It is very important in this career to be able to step-back and take things in with a bit of distance. 3. Don’t be stingy: sacrifice the dime for the point. If resistance is 50 on a great break-out with a beautiful daily chart, and heavy volume, don’t take profits at 50.11 to lock in the dime, wait at least for a point (if you're a daytrader that is). Risk the dime for the point.
4. Accept the consequences of your actions: don’t blame anyone else but yourself for your mistakes, not the market-makers, not the specialists, not the plunge protection team, not your mother, just the person who actually pulled the trigger.
5. Be the Turtle and not the Hare: find a system that works (of course this is easier said that done), and then be patient and wait for your pitch. Don’t hop around from one methodology to another trying to make money every single day. Sometimes you just have to sit aside and let others have their turn.
6. Don’t be judgmental: there are literally thousands of ways to make money in the market. Choose yours, and respect others.
7. Don’t be greedy: one of the most common mistakes of newbies is buying the vertical spike up – they watch a stock move up a point in seconds, and they join the momentum so that they, too, can get an easy point in seconds. Most of the time, the only easy thing is the immediate reversal as experienced traders sell into the spike. 8. Focus on your goal and work hard: Try not to get distracted by chatrooms, noise, phone calls, and CNBC (not to mention all the traders we know who have porn on in the background). During the trading hours, focus on the objective and nothing else.
9. Don’t be an idiot: as we have often said in our newsletter; losing is an integral part of this business, but if you’re going to lose money, then at least lose it on a great set-up that just didn’t work out instead of some lame trade that you normally would have never pulled the trigger on. Let’s say stock HCPG breaks-out on the daily charts at 50 with excellent volume and a great intraday set-up. You take a position at 50.06 and later on in the day are stopped out at 49.8. Now that’s a normal loss and one is that completely part of the business and in the long run, unavoidable. However, buying a penny-stock because of something you read/overheard in a message board/blog/party is a stupid loss and something that is completely avoidable. Remember how easy it is to lose, and how hard it is to consistently win.
10. Be Good: events are more interconnected than you think. Have some karmic fear: Try not to live a life which will lead you to be reborn into a toad. Be kind, work hard, help others, be smart, and eventually, everything else will fall into place.
