These are general trading rules that serve as a foundation for your strategy. You must work on them further to develop a precise plan tailored to your preferences, the markets you trade, your time zone, and other related variables. The goal is to create a clear, actionable framework that you can follow consistently every single trading day.
General Trading Rules
Categorize Observations into Binary Decisions
Simplify decisions into two options (e.g., Risk On vs. Risk Off).
Decision determines the trade approach. ️
Follow a Rule-Based System
Rules are essential for processing setups quickly and accurately. ️
Focus on keeping the process simple and systematic.
Market Conditions
Trend vs. Trading Range
Trend:
Look to swing more of your position.
Uptrend: Prioritize buying.
Downtrend: Prioritize selling.
Trading Range:
Buy low and sell high (scalping focus).
Risk Management
Evaluate Risk On vs. Risk Off for each setup.
Probability Assessment
Categorize setups as High Probability vs. Low Probability.
Execution
Stay Agile
Constantly assess market conditions and adapt strategies accordingly.
Focus on Key Setups
On average, expect about 40 setups per day.
Be selective and only act on setups that meet your criteria.
By personalizing these rules and following them diligently, you can bring clarity and consistency to your trading process.