Summary of Money Management and Trading Guidelines

The most important elements of money management and trading are the following

• Trade in the direction of the intermediate trend
• When there is an uptrend, buy the dips and for the downtrends sell on the bounces
• You need to let the profits run and cut your losses short
• Use stop losses to limit your losses
• You need to have a plan and never trade rashly
• Plan your work and work your plan
• Always use money management principles
• You need to diversify but remember that you don’t overdo it
• Employ at least the 3 to 1 reward to risk ratio
• When you are adding positions follow
  • Each successive layer should be smaller than before
  • Add only to winning positions
  • Never add to losing positions
  • Adjust stop loses to the breakeven point
• Never receive a stop out; don’t throw good money after a bad trade
• Close the losing positions before the winning ones
• Work from the long term to the short term
• Use intraday charts to fine tune entry or exit points
• Master intraday trading before you try it
• You need to learn to be comfortable as a part in the minority
• Technical analysis is a skill that improves with experience and study. You need to be always a student and keep learning
• Keep it simple because more complicated isn’t always better.