50 trading rules from Matthew Bradbard
1. Use money you can afford to lose - always trade with risk capital
2. Know yourself - be disciplined, always controlling your emotions
3. Start small - do not over commit until you learn the mechanics
4. Don't over commit - always keep excess margin in your account
5. Isolate your trading from your desire for profit - try to eliminate "hope" from your trading plan
6. Don't form new opinions during trading hours - do not let day to day fluctuations change your overall plan
7. Take a trading break - trading everyday may cloud your judgment
8. Don't follow the crowd - if everyone is leaning one way it is most likely the wrong way
9. Block out other opinions - do not be influenced by others once you form an opinion
10. When you're not sure, stand aside - it is ok to be in cash and not in the market
11. Try to avoid market orders - always using market orders to buy and sell shows a lack of discipline
12. Trade the most active option month - look for where the open interest and liquidity exists
13. Trade divergence between related commodities - large divergences within the same sector generally present an opportunity
14. Don't trade too many commodities at once - following several markets at once is difficult and usually costly
15. Trade the opening range breakout - breaking out of the opening range generally sets the tone for the direction of the coming move
16. Trade the breakout of the previous day's range - this helps getting in and out of positions
17. Trade the breakout of the weekly range - again like the daily breakouts use breakouts as buy and sell signals
18. Trade the breakout of the monthly range - the longer time frame the more market momentum behind your trading decision
19. Build a trading pyramid - when adding to a position add fewer contracts than your base commitment
20. Never put your entire position on at one price - let the market prove you are right
21. Never add to a losing position - adding to a loser only adds to a mistake
22. Cut your losses short - admit when you are wrong, it is a part of trading
23. Let profits run - do not get out for the sake of taking a profit, have a legitimate reason why you are closing a position
24. Be impatient with losing positions - never carry a losing position for more than 2-3 days and never over a weekend
25. Learn to like losses - they are a part of the business so accept it
26. Use stops orders cautiously - place or at least know where your stop is when you enter the market
27. Get out before contract maturity - do not stay in during delivery because increased volatility
28. Ignore normal seasonal tendencies - too many people are aware/ remember you are looking for an edge
29. Trade the divergence from normal - trade against what is expected by most
30. Avoid picking tops and bottoms - do not buck the trend
31. Buy bullish news, sell the fact - buy the rumor and sell the fact (playing reports)
32. Bull markets die of overweight - pay attention to bearish news when bull markets look top heavy
33. Look for the good odds - look for trades that have a favorable risk/reward dynamic
34. Always take windfall profits - take quick profits and run
35. Learn to sell short - markets often fall faster than they rise
36. Act promptly - futures are not for procrastinators
37. Don't reverse your position - do not make a 180-degree turn on losers
38. Don't be a nickel and dimer - trying to squeeze that little extra out of the market can be costly
39. Know the price trend - use charts to identify trends
40. Watch for key breakouts through trend lines - use trend lines to determine breakout points and to help with order placement
41. Watch for 50% retracements of a major move - markets have tendency to retrace 50%
42. Use the half way rule when picking buy-sell spots - inside of a price channel sell the upper half and buy the lower half
43. Watch the magnitude of market change - smaller bars on charts can be early indicators of a trend reversal
44. Congestion areas mean support or resistance - when price movement slows there is indecision
45. Major moves frequently climax with a key reversal - a significant high or low can be made on trend reversals
46. Watch for head and shoulder formations - this pattern is very accurate on changes in trend
47. Watch for "M" tops and "W" bottoms - recognize these patterns they are useful and happen often
48. Trade triple tops and bottoms - incorporate this into your trading arsenal as triple tops and bottoms generally serve as solid support and resistance levels
49. Watch volume for price clues - volume up and price up buying confirmation, volume up and price down selling signal, volume decreases look to stand aside
50. Open interest may be a tip off - use open interest increases and decreases much like volume as buying and selling signals
