## *BACK TO CLASS*
we're going to continue from where we stopped on our last post.
*Rule 4: Protect Your Trading Capital
Saving enough money to fund a trading account takes time and effort. It can be even more difficult if you have to do it twice.
It is important to note that protecting your trading capital is not synonymous with never experiencing a losing trade. All traders have losing trades. Protecting capital entails not taking unnecessary risks and doing everything you can to preserve your trading business.
*Rule 5: Become a Student of the Markets
Think of it as continuing education. Traders need to remain focused on learning more each day. It is important to remember that understanding the markets and their intricacies is an ongoing, lifelong process.
Hard research allows traders to understand the facts, like what the different economic reports mean. Focus and observation allow traders to sharpen their instincts and learn the nuances.
World politics, news events, economic trends—even the weather—all impact the markets. The market environment is dynamic. The more traders understand the past and current markets, the better prepared they are to face the future.
*Rule 6: Risk Only What You Can Afford to Lose
Before using real cash, make sure that money in that trading account is expendable. If it's not, the trader should keep saving until it is.
Money in a trading account should not be allocated for college tuition or the mortgage. Traders must never allow themselves to think they are simply borrowing money from these other important obligations.
Losing money is traumatic enough. It is even more so if it is capital that should have never been risked in the first place.
stay tuned for my next post.
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