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Your Goals as a Day Trader

Your first goal every day of your life as a day trader is to end the day with a profit. Place no dollar amount on the profit. To set г goal too high would be unrealistic and to set a goal too low mighl be aiming too low. Another type of goal - the goal of following your rules and being true to your methods - is the major goal oi the day trader. However, if you do need to establish a goal foi yourself in terms of dollars, then try to end each day with a smal profit at the very minimum. As a secondary goal, you shoulc attempt to follow all your rules and methods. In fact, your goal o: ending each day with a profit will not be possible unless you have been true to your systems and methods.

Don't Exit Trades Too Soon

Too many traders exit their profits too soon. Note that the histori cal results and statistics on the indicators and systems presentee in this book are based on exit at the end of the trading day or on г trailing stop loss. To exit trades before the system or method sc dictates is to violate the rules that I have presented to you. All toe often you will exit a trade based on a whim, a hunch, a fear, a concern, or a news item, and you will be very sorry later that yot did so. A good trade is a good trade. Do not exit a profitable da] trade either until the end of the day or unless your trailing stoj loss is triggered according to the rules. I cannot stress this too strongly.

At times you will want to exit a trade, but you will follow th< rules and avoid the temptation. At the end of the day you wil realize that breaking the rules would have resulted in a large prof it. Instead, you followed the rules and took a small profit. This i the nature of the markets. For every one time that you break thi rules, at least twice as often you will find that following the rule would have been more profitable.

Furthermore, not following the rules teaches you nothing. Ever time you break a rule you will have a different excuse. The onl; thing that breaking the rules will teach you is to break the rules As a result, your trading will deteriorate and you will quickl; become one of the thousands of undisciplined traders who inhabi the vast wasteland of losses.

Don't Hold a Profitable Day Trade Beyond Its Ideal Exit Point

Many a good day trade has become a bad day trade, turning from a profit into a loss, because of poor intraday risk management or to the tenacity of the trader. Holding on to a winning trade beyond its exit point (i.e., trailing stop loss) can also get you into trouble. Please remember the rules I have given you about trailing stops based on the systems presented herein. This is an important rule that you must not violate. Preservation of capital is quintessential to consistent success as a day trader, and preservation of profits is equally as important. The mere fact that a trade looks too good to exit is just as much a violation of the rules as is exiting a trade because it looks bad. Remember that "looking good" or "looking bad" are subjective and intuitive responses that have no place in the repertoire of a day trader unless that day trader is a bona fide psychic with a proven track record of trading success.