5 Trading Rules For October
Here are 5 trading rules you should follow in October so you can have profits in your account & a big smile on your face by Halloween...
The month of September is over and it's now time to talk about the month of October. I thought I would recap my month of September and create five rules that I wrote in my trading journal that I plan to focus on for next month. I really hope that you even see value and maybe just one of them, right? That you think that can work towards making you a better trader, right? And that's the whole idea is that even years being into this, there's no such thing as being perfect. It's just working on your craft and trying to show signs of progress. So I hope you learned something new and if you do, please consider dropping a thumbs up and subscribing. If you have any questions, even if you're an absolute beginner, please do not hesitate to send me a direct message via discord or via Instagram, which is of course linked down below. So let's keep it simple.
My five trading rules for the month of October:
1. My first one is making sure that I close out each position each day and this is 100%. I do have a very common habit of encouraging and also doing closing out most of my position. But sometimes I do like to leave five, 10 or maybe even 20%. Sometimes I like to even maybe take a position pre-market when direction is not super, super clear. But let me explain the cons of that when it comes down to carrying a position overnight, there's an uncontrollable amount of risk, right? Because we don't know if the market's going to gap up or gap down. So therefore, if even my 20% position of TKQ is down, if it's down two or three percent, 20% is still 100K based off of what I trade with. Being down two or three thousand dollars at that point, I'm playing catch up, right? And that's not something that I want to do, right? So for the month of October, I want to build a healthy habit of making it a just a habit and routine of mine. So regardless of how my day turns out to close out my position and to make sure that I start fresh, the benefit of this or the pros is that by closing each position out each day, I get to start the next day and really choose if I even want to trade. If the market is bullish, it's direction clear enough where I want to go long, it's direction bearish enough where I want to go short, right, excuse or TQs. And at that point, I'm given options and I'm not playing catch up. I might miss out on some gap ups or some gap downs, but I would rather miss out on plays than to start off in the red. And that's just again, one of the habits that I want to work on for the month of October.
2. Second is allow the market to paint the picture for the day, meaning that I often find myself, not too sure if this is just me, you guys let me know in the comment section. I often find myself taking a trade too early where the market might be bullish pre-market hours, but as soon as the market opens, market goes red, right, or begins to sell off. Market starts off in the red, but then all of a sudden, reverse is right. I've noticed that if I am patient for at least first hour to maybe even two hours, I allow the market to decide, you know, kind of run up, sell off, consolidate whatever the market needs. I allow it to paint its picture for the day, right? At that point, I have more data to go off of to then determine, do I even want to trade today? And this has almost even encouraged me that maybe one or two of the days out of the week for my live trading sessions to maybe consider going live one or two hours after because I don't want to feel forced that I need to take a trade right out market open because, again, market just opened and I don't want to make a misjudgment right out market open just to entertain the people that are part of all P.P. So let me know in the comment section what you think about that by allowing and giving the market more time to paint its picture for the day. I plan to make that a habit where I will therefore then make more informed decisions based off of more data that I have to go off of. And I think, again, giving the market more time to paint its pictures is probably a habit that we can all pick up on, right?
3. The third thing is getting better at closing at signs of a resistance and not afraid to lock in profits or close the position regardless of how much it is that I'm up or down. It kind of goes back to the principle of the blind trading challenge. If you're part of my LPP team, it's this concept that we've brought up where we close out how much we're up or down right the PNL and we focus on the trade because realistically how much you're up or down is insignificant to the actual trade, right? The dollar amount that you're up or down only matters to you based off of the money that you have in it. But at the end of it, you shouldn't be taking the trade and entering or exiting based off of how much you're up or down. It should be, is the trade still valid, right? Is it still indicating signs of an uptrend, still signs of progress, right? Is it at a resistance? Is there a why on why you should buy or add more or sell or cut losses? Those are the important things, right? Not so much about, I want to make an additional, you know, 500 bucks or a couple bucks here, a couple bucks there. Oh, no, I just want to make back what I was up, right? I go through that mental warfare myself as well. I know I can't be the only one. But I want to make it a better habit that regardless of how much I'm up or down that if I see signs of a resistance and it's beginning to curl over, I don't care about the few cents just to exit. Now, I don't want to hesitate. I want to make that a good habit because I want to lead by example for all the people that are part of my LPP team.
4. So fourth, make my money and walk away. I have noticed that I get more done throughout the day. When I come in, I allow the market to paint its picture. I have no open positions. I wait for my proper setup. I take the trade, I close it out and then I just move on with the rest of my day. I often find myself that I spend, if I spend too much time in the market, watching the market, I tend to over trade and my later trades are often not the best trades. And if I do make much more money, if I do make more money, it's not much more and it ends up again, just efficiency wise. I just would like to enjoy the process more. I want to continue to look forward to what it is that I do every day and I want to keep it enjoyable. And sometimes when I spend too much time in the market, it's just not the most enjoyable thing, right? It's like watching paint tries. So I want to be efficient with the time that I spend trading and that once I do, either hit my goal for the day to not be afraid to walk away and continue with the rest of my day and then just wait for the next opportunity the next day. So making a good habit of making my money and walking away.
5. And the fifth thing that I want to focus on is having a max dollar loss or percentage loss, no exceptions. And minus $5,000 meaning that if I lose $5,000, if I'm down $5,000 on a trade, I don't care if it's nearly at support. I don't care if it's like at a critical range where it might bounce. If I'm down $5,000, close it out. At that point, I should make sure that when I take the trade that my stop loss and my max loss of $5,000 isn't at a point that might be an inflection point, right? This will only encourage me, you know, $5,000 for me is about a 1% at a full position. I know I can recover from that if needed, right? But I want to make sure that and that's kind of the middle ground. That's how I came up with the figure. $5,000 might be a little bit more challenging for me to come back from, right, of a loss for that specific day. But I know if I'm down to $3,000, $5,000 being my max loss, I would feel pretty comfortable and comfortable. Not comfortable. I would feel pretty confident in my abilities to come back from a $5,000 loss on that given day, right? And that's kind of the idea is I want my loss to be something that, wow, okay, it's big enough that I need to close it out here, but it's not so big that I can't make it back or work towards making it back if needed, right? Obviously, I don't want to over trade. I don't want to revenge trade, but it's like this middle ground where even if I close it out and I end the day that way, I know, you know, moving forward, it's not going to be something that might be devastating or more discouraging, you know, losing $20,000, $30,000, $50,000, much more challenging to come back from. So again, having a max dollar loss, closing it regardless of what excuse I might have in my mind, cutting it there. And then again, waiting for a more ideal setup. And one of the quotes that I want to leave you with, let's say, let's see if I remember it clearly is the idea of, remember, cutting losses or risk management is not the end of a trade, right? Or it's not something that defines you as a bad trader. It's simply a new opportunity for you to enter a new position more effectively and efficiently. And I think that's a beautiful way to look at it, right? It's a very forward way of looking into why risk management is so important. So those are my five rules that I plan to focus on in the month of September.
You guys let me know down in the comment section, which one out of those five rules you value the most, if any, right? And feel free to share your five rules that you plan to focus on for next month to work towards becoming a better trader. I really hope that it learned earned your thumbs up. I hope that you guys can hopefully you guys can consider subscribing. I do trade live every morning, exclusively with my LPP team. It's the only team that I work with on a closer basis. And I would love to invite you to our live trading session. I work with them every day. It's the second link in the description down below. We're running our biggest sell. It's a one time payment, lifetime access. And you'll be able to watch me trade live as soon as the market have been to the next day. So really do appreciate you guys time.
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