Trade rules by Jack Schwager


7. If you have when you look at the chart (especially if you do not think, to any market it belongs), immediately there is an instinctive feeling, follow that feeling.

8. What you have missed a significant part of a new trend, should not deter you from trading in line with this trend (as long as you can determine a reasonable stopping point loss).

9. Do not play against the bull or bear trap (last nesrabotavshih price formations), even if other factors encourage you to do so.

10. Never play against the first break in the price action! For example, if you want to take a position in the direction of correction, and the correction is formed on the price gap, do not enter the market.

11. In most cases, instead of limit orders (executed at a specified price), use market orders (executed at the current market price). This is particularly important in the elimination of unprofitable positions or open positions associated with favorable opportunities for long-term transactions, in situations where it is important not to miss the current prices. Although limit orders will be given a somewhat better price performance in the vast majority of transactions, this advantage will usually be more than overlap considerably worse prices or lost opportunities for profit in those cases when the original limit order is not filled.

12. Do not increase the initial position near the entry point in trading after the market was already on a favorable position for your site, and returned to their original prices. Often, the fact that the market has made a full refund, a negative sign for the trade. Even if the position is still well established, its increase in this situation can lead to premature fixation losses due to increased risks of adverse price movement.

Exit the trade

13. Decide on the level of protective stops in the opening position.

14. Get out of any transaction, if the newly formed pricing models or market behavior opposite direction of your position, even if the stop point has not yet been achieved. Ask yourself, "If I need to have a position in this market, as it should be directed?". If the response does not match the position you hold, close it. In fact, if the opposing figures are strong, deploy position.

15. In any case, immediately close the deal as soon as its initial conditions are violated.

16. If the first day of your trade turns out that you are essentially wrong, immediately get out of the deal, especially if the market is discontinuous, directed against you.

17. In the case of a massive breakdown against the position that you hold, or immediately liquidate a position, or use a very close stop. In case of breakdown with a break liquidate positions immediately.

18. If trade in this market begins to significantly exceed the previous volatility in the opposite direction of the position you hold, immediately liquidate their position. For example, if the market in which trading took place in the daily range is about 50 points, opened by 100-150 points higher immediately cover their short positions.