Jani’s Trading Rules

Lessons learned from more than a decade of trading experience:

  1. Speculating is hard
  2. No matter how discouraged #1 makes me feel, never forget life is good
  3. Trade proactively, not reactively
  4. If it doesn’t feel right, get out!
  5. If something isn’t working, STOP!!!
  6. When I’m right, trading is easy. If trading is hard, then I’m doing something wrong
  7. Often the best trade is to not trade
  8. Never let a loss affect my life outside of the market
  9. If too many people agree with me, get nervous
  10. Trade the trend unless there is an unexpected and compelling reason not to
  11. What the market isn’t doing is almost always more insightful than what it is doing.
  12. Take profits when I want to keep holding
  13. Keep holding when I want to take profits
  14. When it feels like I’m really good at this, sell everything because something bad is about to happen!
  15. Put more effort into figuring out why I’m wrong and spend less time justifying why I’m right
  16. The best trades are often the hardest to place
  17. If it is too easy to make a trade, then I’m probably wrong
  18. Long-term success comes from minimizing losses, not maximizing profits
  19. Don’t swing for the fences: twelve 5% profits leads to an 80% compounded gain*
  20. I am more successful when I buy early and sell early
  21. Never give up and never stop learning!

These are mine, what are yours? Share your best lessons and rules in the comments below.

*Compounding works to our benefit in both directions. While twelve 5% profits leads to an 80% gain, twelve 5% losses only results in a 46% loss of equity. 80% gain versus 46% loss, gotta love that risk versus reward.