5. Keeping it simple and stupid is one of my firm rules. When I was a beginner, I would check multiple indicators, news sources, and patterns in an attempt to find the optimal trading method. This often led to over-analysis. When I see a trading opportunity on the chart, understanding stop-loss and position sizing is far more important than timing entry and exit.
6. Only trade when in a calm mindset. This is crucial. When I feel angry, tired, or stressed, I do not trade. I must focus on using my best judgment to trade when I am calm. Life outside of trading is key to maintaining the right mindset. Spending time with family and friends, reading, and engaging in sports are all critical to my trading success.
7. Keep a diary. Diary-keeping is boring and tedious. It is also important because it helps us avoid making the same mistakes twice. I must remind myself to slow down, stop looking at the charts, and take the time to record as much information about my trades as possible.
8. Do not blindly chase dips. Trying to perfectly catch the bottom is unwise; one should wait for clearer trend reversal confirmation signals. Trading with the trend is much less risky than trying to buy low and sell high.
9. Do not overtrade. I find that the fewer times I trade, the more money I make. Even when the market presents many opportunities, I try to keep the number of open trades to less than three. Managing multiple trades is much more difficult because if each trade goes against you simultaneously, you could suffer significant losses.
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