Norman Ralph Augustine, a successful business tycoon of the USA had once remarked:: "If stock market experts were so expert, they would be buying stock, not selling advice." And, in these words lie the unpredictability of anything associated with the stock market and largely to many other financial markets. Nevertheless, over a period of time, traders and investors in equity stocks, derivatives, other financial assets and commodities have perfected many Trading Rules apart from various Investment Theories and ‎Investment Strategies.

These Trading Rules have evolved based on real time experience and are sum total of trading experiences of scores of stock traders and other investors and traders, trading and investing in financial, as also certain types of other assets. Generally, the Trading Rules outlined below pertain to trading in equity stocks, derivatives and other financial assets - though to a large extent the same rules are also applicable to trading in commodities.

Some of these Trading Rules are listed below, followed by a brief outline about each of them. In case, you have any experience to share, you are most welcome to add your experience and comments on the pages related to one or more of these rules.

Trading RulesEdit

"Would you tell me, which way I ought to go from here?" said Alice to the rabbit.
"That depends a good deal on where you want to get to," replied the rabbit to Alice.
Alice in Wonderland by Lewis Carroll

Interestingly, the above conversation aptly describes the predicament of a stock trader and an investor in stocks and other financial assets. However, generally, trading in equity stocks has been an intuitive, as also a well acquired and well practiced art and science. Over a time frame running into generations of stock traders, certain Trading Rules have emerged. Some of the time tested Golden Trading Rules are:

  1. Divide Your Trading Capital
  2. Don’t Overtrade
  3. Withdrawing a Portion of Your Profit
  4. Don't Hurry To Take Profits
  5. Don't Trade Many Markets Simultaneously
  6. Trading with the Trend
  7. Don’t Follow the Crowd
  8. Look for Reasonable Profits
  9. Book Big Profits & Take Small Losses
  10. Preserve Your Capital
  11. Buy the Rumour and Sell the Fact
  12. A Time shall Come when the Market Must Reverse
  13. Big Movement Takes Time to Develop
  14. Trade Only in Active Stocks and Derivatives
  15. Don’t Try to Pre-determine your Profits
  16. About Closing Out Your Trade
  17. Keep Chart Up-dated
  18. Tips Mostly Don’t Earn You Any Money
  19. Speculative Position Should not be Allowed to turn into Investments
  20. Don’t Be Too Smart – the Smarter You Are, Longer It Takes
  21. No Wishful Thinking in the Markets
  22. Respect the Market: Markets are Never Wrong, Opinions May Not be Correct
  23. Bull Market Has No Resistance & Bear Market Has No Support
  24. Concentrate on Very Few Markets At a Time
  25. Selling Short, as often as Going Long
  26. No Discretionary & Partnership Accounts
  27. Easy to Enter a Trade, Harder to Get Out
  28. Money cannot be Made Every Day
  29. Preserve your profit - Don't Allow ever to Turn a Profit into a Loss
  30. Controlling & Managing
  31. Don’t Buy a Stock Only To Obtain a Dividend
  32. The Smarter You Are, the Longer It Takes
  33. Not Permitting Speculative Trades to Turn into Investments

See alsoEdit

External resourcesEdit

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