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Walt's Cardinal Rules for Successful Trading
1. Use Risk Capital Only
Only speculate with "venture capital," money which you can afford to risk.
2. Don't Overtrade
A. Don't trade too large a position C. Don't take time from family and friends.
B. Don't trade too many different markets. D. Don't trade too often.
3. The Trend is Your Friend
Go with the flow. Don't paddle your boat upstream.
4. Cut Your Losses Quickly, Let Profits Run
The market may move much further than you anticipate.
5. Don't be Afraid to Sell Short
Markets often decline much faster than they rally upwards.
6. Start Small
Increase the size of your trading after you have gained experience.
7. When in Doubt, Stay out
Have a reason for entering the market. Don't trade just for fun and excitement. There will be more opportunities tomorrow.
8. Buy the Strongest... Sell the Weakest
Go long the market making new highs, short the market making new lows.
9. Learn to Like Small Losses
They're part of the business of creating large profits.
10. Always Use a Plan with a Stop Loss Order or Protective Option
Never move your stop away from the market.
11. Hunt for Good Risk/Reward Ratio
Make sure potential profits exceed prospective losses.
12. Add Only to Profitable Positions
Never add to losing positions.