So, some of you may have been wondering what has been happening in my life, well hopefully at least one.
I’ve been based in the Middle East for the last few weeks and have been working in brokerage. My roles have been varied from making tea, updating reports, writing business proposals and purchasing cutlery for a prince. Yeah, you read the last one correctly, trust me, it surprised me as well; especially as I had been learning how to load a ship with grain the previous day.
So what brings me to writing again? Well today (well, yesterday technically) there was a 7% collapse in oil prices. That’s a pretty big amount to the uninitiated. And I happened to be on the wrong side of this. Now I didn’t lose twenty thousand pounds or anything, but what I got was a course on what to do when trading. Now obviously this is wear I insert a legal disclaimer not to take my advice seriously, that it is a matter or opinion and not fact, that I’ll be not liable for your mistake and that you have to be an absolute idiot to take advice from a blog. Might as well ask Deloitte or KPMG to audit someone!
Right without further ado, here is my list of rules (so far) of what to do when trading
1. Always Trust Yourself
Might be a bit odd for a first rule, but it is important. When you go into the market, there is only one person who did it. There is only one person who says enough is enough. Whatever happens, just as in life, you are ultimately responsible for your position. So, when you go in, know that you will have to get yourself out.
2. Don’t listen to others
While taking ideas from someone is okay, if you want to go short. Go short. Even if you were told to go long. You are responsible for the outcome of your input.
3. Don’t Go Chasing
This is quite simple, when you have made a loss, don’t go chasing a profit like a monkey running at the window. Go take a step back and reassess what is happening in the market.
4. Always Cut Mistakes
You are allowed to make mistakes. Just don’t keep them! No matter what is happening in the market, profit or loss. If didn’t mean, get rid of it.
5. Don’t have fat fingers.
It means, avoid making silly mistakes, such as hitting three before hitting enter. Never done that……
6. A trader is only as good as their last trade
It doesn’t matter that you predicted the financial crash, or the dotcom bubble, if you lost it all yesterday. It’s like in football, only the last result matters. (Unless you support Arsenal, can’t change from being shit if it’s part of the DNA)
7. Don’t be a sheep
Know this looks like rule 2, but it’s not. It’s similar. To make big money quickly, you have to be ahead of the curve (easy in principal, not in practice). So, it’s not just listening to others and trusting oneself; it’s also being a bit bold. Not cocky, the market will, just tear you to shreds.
8. Be Lucky!
There’s no two ways about it, if you are being bold
9. Have more than one escape plan
When you enter the market, know what loss you are willing to make. And follow it! If you ain’t lucky, no point in being stubborn and stupid either. Might as well be a Marxist then. In the same light, take the profit when you get to the point you wished. Sure, there may be some regret when the position would have made more money. You can still chuckle to the bank, even if you are not laughing your head off,
10. Follow the cardinal rule of Uncle Digby!
The trend is your friend!