Alexander Elder’s 7 Rules for Traders

25 February 2013 - 20:31 pm

1. Decide that you want to trade for the long haul. i.e decide that you want to trade 20 years from now.

2. Learn as much as you can. Read, and listen to the experts, but keep a healthy disbelief about everything.

3. Do not be greedy and rush to trade – take your time to learn. The market will be there with many good opportunities in the months and years ahead. 

4. Develop a method for analyzing the market, that is, if A happens, B is likely to happen. Markets have many dimensions – use several analytics methods to confirm trades.

5. Develop a money management plan. Your first goal should be of long term survival, second goal, a steady growth of capital and third goal, making high profits.

6. Be aware the trader is the weakest link in the system. Learn how to avoid losses and develop your method of cutting out impulsive trades.

7. Winners think, feel and act differently than loosers. You must look within yourself and strip away the illusions and change your old way of thinking, acting and being. Change is hard, but if you want to be a successful trader, you have to work on changing your personality.

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