Some Advise By Old Timer ( Not Me :))

I'd like to share some trading principles. These 10 principles are the top 10 from a list of 50 principles that was compiled from a pamphlet printed 30 years ago entitled "How Young Millionaires Trade Commodities" and these principles still apply in today's market. These principles should be observed to ensure long term success in the financial markets. Whether you trade commodities, stocks, indices or forex, these principles apply.

1-Use money you can afford to lose - Never use money that you cannot afford to lose. Trading and Investing have to be stress free. Using money that you cannot afford to lose introduces fear, this clouds your judgement and can paralyse you from taking advantage of opportunities presented.

2-Know yourself - be disciplined, know your weaknesses, control your emotions. You have to be disciplined to survive in this 'business'. You need the dicipline to stick to your trading plan.

3-Start small - try and master the mechanics first. Most people jump into trading risking their life savings. You have to start small and learn the basics. The truth is if you can't make money using a small amount of capital, you would never making money with a large amount of capital.

4-Don't over commit - A trader once said to a fellow trader, "I can't sleep at night because of my positions in the market". His friend replied by saying "Sell down to a level that would allow you to sleep at night".

5-Isolate your trading from your desire for profit - try to eliminate "hope" from your trading plan.

6-Don't form new opinions during trading hours - do not let day to day fluctuations change your overall plan.

7-Take a trading break - trading everyday may cloud your judgement.

8-Don't follow the crowd - More than 80% of traders or participants in the stock market are wrong. Identify what works for you and stick to it.

9-Block out other opinions - do not be influenced by others once you form an opinion. Never seek for tips.

10-When you are not sure, stand aside - it is ok to be in cash and not in the market.


In trading, if you adhere to these basic principles and apply diligence, profits will come.
Deji Odusi has been using the stock market to generate an extra source of income for over four years. Deji emphasises that technical analysis words if you take time to understand the techniques, find your edge and diligently stick to your plan. His eBook, "Your Blueprint for Making Money in The Stock Market". This is available on Lulu.com

His blog is http://www.diligenttrader.blogspot.com

His web site is http://www.diligenttrader.com


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