Key Trading Rules Every Trader Should Know

Plan Every Trade and Trade the Plan
Every trade needs a clear entry, exit, and stop-loss level. When a plan is in place, traders avoid emotional decisions. A well-thought-out plan helps to stay on track, especially when the market moves unexpectedly.

Risk Management First
Keeping risk under control is essential. Limiting risk per trade to a small percentage of the portfolio, such as 1-2%, prevents large losses and keeps capital intact for future trades. The aim is to survive the market over the long term.

Don’t Chase Trades
Jumping into trades impulsively often leads to regret. Wait for setups that meet personal trading criteria. Missing a trade is okay; there will always be more opportunities.

Cut Losses Quickly and Let Winners Run
Losses are part of trading, but they should be kept small. Set a stop-loss and stick to it. On the other hand, when a trade is working, let it grow by following a strategy that locks in gains along the way without cutting the winner too early.

Stay Disciplined, Avoid Emotional Trading
Discipline is the backbone of successful trading. Following a strategy, managing emotions, and sticking to rules prevents rash decisions that can erode profits.

Review and Reflect on Every Trade
Each trade holds a lesson. Keep a journal of trades, recording the setup, the result, and any emotional responses. Reviewing this helps spot patterns and refine strategies over time.

Adapt to Market Conditions
Markets change. Sometimes they're trending, and other times they’re range-bound. Being adaptable ensures traders don’t apply the same strategy to every condition and instead respond to what the market is offering.

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