Trading Rules that Work


  • Pages: 208
  • Format: PDF
  • Published Date: 2008


Trading Rules that Work: The 28 Lessons Every Trader Must Master

Trading Rules that Work introduces you to twenty-eight essential rules that can be shaped to fit any trading approach—whether you’re dealing in stocks, commodities, or currencies.


The rules of trading are much like that stolen letter. We often accept the various rules that have been taught to us as traders, but the psychology behind those rules is so inherently assumed that we overlook it. The psychology that really makes those rules work is often hidden in plain sight.

As traders, we all would agree that properly applying the rules will help us better achieve consistent trading success, and we all know from personal experience that breaking the rules has cost us money in the markets. None of us want to admit we break the rules (and some of us don’t even want to admit we need rules). So why don’t we follow the rules?

The purpose of this book is to outline the deeper psychology behind most of the accepted trading rules and provide you, the individual trader, a better understanding of how to make your rules work. The rules are actually guidelines grouped into four separate parts; the underlying, basic psychology of each individual part is explored as each rule guideline is shown in proper context.

As most traders know, there are literally unlimited ways of interpreting price action, choosing execution points, or formulating a hypothesis of general market conditions or potential price action.

The intention is not to provide you with another trading system God knows there are enough of those but rather provide you a way of showing you two things to improve your trade approach: how you think and how the market thinks.

Part I, “Getting in the Game,” outlines the psychology of market price action, what that can only mean as far as your trade selection is concerned, and how to begin from the point of a strong market presence.

Part II is “Cutting Losses.” Every trader has had losses, and every trader still participating every day will tell you how important cutting losses is for the long-term health of a trading account.

Part III explores the opposite dynamic: “Letting Profits Run.” Every trader at one time or another has liquidated a winning trade, only to see that trade continue farther and farther in his favor.

Part IV is “Trading Maxims.” In Part IV we look at the some of the most common trading rules and how they have both negative and positive
psychological implications.


  • Getting in the Game
  • Cutting Losses
  • Letting Profits Run
  • Trader Maxims