Here I go with another Step by Step.
This is what I think the hardest part of trading: stablishing rules. Well, in fact not ar harder as to follow 'em but let’s talk about it some other day.
In our woo hoo trip to trading after going trought the “stage we don’t wanna speak of” we tend to hear that we must set our rules and follow them but it is easily said than done because we make it just overnight and larger than the constitution and in most cases unrealistic.
This must be done gradually and based under your own experience and most (not all) succesfull traders i know they are still in the process of making the book of rules wich it doe not precisely mean to change rules constantly. And the first rule (or rules) you must stablish is the related to limiting loses. My Limiting Loses Rule is based on my own experience in how much pain I can realy tolerate not what others say i must tolerate, I cannot tolerate more than one lose per week despite some say they can tolerate more. So my first rule states “One loss per week only” and if i must add or change a sinlge word i must analise it first and do so next month and follow it for that month and the next before thinking into change anything.
I have a policy of “Once positive, remain positive for the rest of the month” wich i heven’t written yet but it is programed to be added to the book next month but I still don’t know where I am going to put that rule.
As you can see, my book of rules despite my success is still half the way to be completed and I am intentionally delaying the process just for fun.
Regards.