Loss goes against the human nature as we tend to keep on giving space to the losing position. To be successful in the market; one need to follow the undermentioned guidelines to make money in the market.
- Never add to a losing position. Stay out of trouble, your first loss is your smallest loss.
- Analyze your losses. Learn from your losses. They are expensive lessons; you paid for them.
- Most traders do not learn from their mistakes because they do not like to think about them. Survive! In futures trading, the ones who stay around long enough to be there when those "Big Moves" come along are often successful.
- If you are just getting into the markets, be a small trader for at least a year, and then analyze your good trades and your bad ones. You can really learn more from your bad ones.
- Carry a notebook with you, and NOTE down interesting market information. Write down the market openings, price ranges, your fills, stop orders, and your own personal observations.
- Re-read your notes from time to time; use them to help analyze your performance. "Rome was not built in a day” and no real movement of importance takes place in one day.
- A speculator should have enough excess margins in his account to provide staying power so that he can participate in big moves.
- Take windfall profits (profits that have no sound reasons for occurring).
- Periodically redefine the kind of capital you have in the markets.
- If your personal financial situation changes and the risk capital becomes necessary capital, do not wait for "just one more day" or "one more price tick”; get out right away. If you don't, you will most likely start trading with your heart instead of your head, and then you will surely lose.
- Do not use the markets to feed your need for excitement.
- Always use Stop LOSS, Always...Always...Always.
