Thou shall track the float of a stock before trading.
Don't get caught with your pants down in illiquid stocks with low floats, (less than five million shares). I mean, you can trade them and profit but that would require watermelon sugar sized balls. Low float stocks have a smaller number of shares available for trading, and because of this they tend to be incredibly volatile due to the low amount of supply. Trading low floats would entail tip-toeing your way in and tiptoeing your way out.
Thou shall not chase, thou shall buy the dip.
There are going to be opportunities to buy the stock you want on the dip. You don't want to buy at the top and get cucked with a bag, right? Just because you see your favorite Twitter guru post a stock idea doesn't mean you automatically have to rush in. Have some PAYtience. That means waiting to buy and waiting to sell.
Thou shall develop thy own MF'in plan.
Seriously! You can't be asking others for their price targets and if they're "still holding". Clean up after yourself and follow your own rules. Someone may have a different risk tolerance and strategy than you. Do your own work.
Thou shall dip thy pinky toe before diving in.
Don't blow your load in one entry. No need to bum rush a stock like it's the hottest piece of meat you've ever seen at the bar. Wipe the dribble of drool off your chin and pick an entry based off of your own plan and risk. The risk will determine your size unless you're in the business of YOLO trading. There's nothing wrong with slowly scaling into a position and slowly scaling out. I promise we won't make fun of you for selling half when the thing is supposed to "go to the moon". Another thing, it's okay to paper trade. I do it to sharpen my experience. Treat it like the real thing so you're ready emotionally and mentally whenever you go live.
Thou shall cut thy losses quickly.
Don't bag hold. Or do, it's your money. You don't want to be caught in the game of musical chairs without a chair. Cut your losses when the play is over, otherwise, you'll turn into a long term investor of "the next Disney" in some random penny stock.
Thou shall not get thy knickers in a twist (don't get emotional).
Look, sometimes things don't work our way. The market was designed to prey on us, the retail noobs. It's a giant game of chess between billionaires, we're not supposed to be in this game, yet here we are feeding off the scraps and trying to be like them. That's fine! It's why we try so hard to be cautious and not lose more than we can afford. Don't be a little bitch. Manage your positions and understand that only you are responsible for your losses. Emotions get in the way of successful trading. Think of yourself as a cyborg from the future created to make bank plays so you can afford upscale pizza (that ^&$# is expensive).
Thou shall not overtrade.
Overtrading is the act of excessively buying or selling, more-so buying when trying to find the winning play of the day. Maybe stick to 2-3 tickers with trading setups that you're comfortable with. No need to force anything, especially in bloody markets. Don't find anything you like? Don't worry about it! 11 p.m. to 1 a.m. is video game hour anyway. Preserve capital and don't be wasteful. You're not a California valley girl, are you?
Thou shall not rely on Twitter calls only.
There are good ideas and bad ideas out there. Mine included! Sometimes it works, other times it doesn't. That's why learning how to interpret this stuff is important - otherwise, you're caught like a chicken with its head cut off.
Thou shall be disciplined.
Stick to your own rules and don't break them. Breaking them leads to losses, right? Things like adding more money to your account solely to add more money to a "winning position" that you're averaging down on right now sounds like a recipe for disaster. This game is going to be one of the hardest things you'll ever do. Seriously, I'm not even a pro. I'm learning new things every day, and it's important to recognize you will always be a small fish in a big pond around here. Study, follow your own rules, and put your ego aside. Challenge yourself and meet your goals, which brings us to the last commandment.
Thou shall set goals.
Setting trading goals is the key to working towards where you want to go. If I don't track my progress or set goals to triumph over, how will I know I'm progressing? Sticking to goals will allow you to create consistency in your trading by sticking to your trading plan. Consistent wins, whether small-base-hit gains or monster 200%'ers, are what create successful traders. Remember, it's a marathon, not a sprint.
**Not a financial advisor. Articles are opinions only.
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