Trading Rules


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    Distilled trading rules:

    1. Develop a daily trading plan with targets.
    2. Develop a plan on entry (Starter, add prices, stop and target)
    3. Scale in to all trades, with room for them to go against you, no “all in”.
    4. Only hold winners overnight, if red or flat go into cash, start the day fresh.
    5. Only 0-3 trades per day, more size, less trades.
    6. Let yourself be wrong. (See rule 2)
    7. Rise early and exercise, meditate, supplement and proper nutrition.
    8. Focus
    9. Number 1 goal – Build your account!
    10. Review at the end of every day, really take the time and focus and think.



    Old Rules – Still applicable but to wide and varied.

    1. Be a professional.
    2. Cut Losses Quickly – Max $500 loss per trade
    3. Set hard stop at time of entry – total discipline – don’t adjust stop
    4. Think about risk vs reward on entries.
    5. If a stock is not doing EXACTLY what you want, GET OUT! Set targets and commit
    6. Number 1 Goal – Build your account
    7. Be humble
    8. Three consecutive losers, shutdown, review journal and 500 word blog post about what went wrong
    9.  Sleep – treasure it, make it a tool
    10.  Only trade if physically and mentally prepared. Sleep, supplements, workout
    11.  Track relentlessly and review.
    12.  Never walk away from or ignore a trade, no time, close it.
    13.  Don’t let any trade take you out of the game.
    14.  Try to avoid shorting in the morning, spend that time watching/planning
    15.  Constantly be editing and refining rules.
    16.  Be in cash as much as possible ESPECIALLY OVER HOLIDAYS/VACATIONS/DAYS OFF
    17.  Be aggressive but quick.
    18. Respect the trend – Don’t short strong stocks, wait for weakness
    19. Treat everyone trade as its own entity, don’t let losers effect winners or winners effect losers.
    20.  Broken rules = shutdown for the day

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    10 thoughts on “Trading Rules”

    1. It kind of depends what type of strategy you trade but 3 losing trades in a row might happen more frequently than you think with very good strategies. But, always good to learn from your mistakes.

    2. Agreed, but when I say “shutdown” I just mean long enough to review the journal and write the 500 word blog post. If I’m extra ranty I can get that done in about 15 minutes. The idea is just to take a “time out” and not keep pushing.


    3. I’m debating whether to sign up with SureTrader or not. I don’t have a large account ($1000) but I follow Tim and I paper trade a lot of his short ideas… Most of which are very profitable. I just don’t have the right brokers. What broker do you have? And would you honestly recommend SureTrader even though they now support the 2.50 rule?

    4. I highly recommend Interactive Brokers.

      I can’t recommend Suretrader, I know lots of people use them, but the whole offshore thing makes me skittish.

      I use and am very happy with IB, I know the $10K minimum is a bummer, but I think its tough to make decent money shorting unless you have at least 10K anyway.


    5. Technically yes, I often go in and out of a trade the same day. Though I prefer to be a “swing” trader, holding over a day or two.

    6. Hi Tim,

      Can I trade this method (Investors Underground) as End Of Day trading/order , meaning place the trade in advance before market open? as I reside in Sydney, Australia in have different time zone\

      Thanks for your respond

    7. Oooh, that would be pretty tough, these are the most volatile stocks and you would almost invariably get stopped out at the wrong time… But I’m sure you could probably adapt it to work by using smaller sizes and wider stops. But would be tough.

    8. hi tim
      may you help me of whom you used to follow/learn from : tim sykes / nathan / superman ? what is difference between thier stock picks ? what kind of trading they do : scalp / day trading / swing ? who normally do short selling / long ? what kind of thier trading : pump and dump / momentum breakout ? whom you advice to learn from in priority plz.


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