Trading Rules

If you ask me what is the major difference between a novice and a professional trader, the difference is whether he or she set the trading rules and follow the rules. There are thousands set of trading rules that you can create or follow, what I recommend is that you do not need to create a certain of trading rules, you can just follow them which came from the famous investor and traders.

One of the famous investor that I admire and respect a lot is Warren Buffet. In his world, rules are more important than anything. His famous quote is as follow:
Rule 1: never lose money
Rule 2: never forget rule no 1
Funny enough? But the fact is, many people understand the importance of setting rules but never learn to follow the rules.

For part 1, I would like to share the rules that I follow before I enter the market.

Rule 1 - Always do market research before market open:

Open your CNBC or any finance website to get the latest update, understand what’s happening in the market right now. Either is it oil price drop, or some where having a war, focus on news that may be making any impact to the US market and the stock you are trading. After learning the news, try to figure out the market sentiment, for example, is oil inventory going lower a good thing to the market? Certainly not! With the latest news in hand, it will help you to make a better decision when entering the trade.

Rule 2 - Limit your trading size:

Do not over trade, always make sure you have enough money to play for the next game. Thumb of rule is always using 1/20 of your total money for each trade. If you have $5000, each trade is $250, in that case you can have 20 games to play.

Learn more from TraderWork.com

Trading Rules

Paul's Trading Journal 3 Sep 2008

Stock Symbol: QQQQ
Strategy: Sell 5 Bear Call Spread contract (46/48)
Sold: $0.945, 8/26
Buy: $0.45, 9/3 (today)
Profit/Loss: + $245
Grade: 5 (1 is worst, 5 is best)



Enter trade reason: QQQQ cross 22ma to bearish region, slow stochastic and MACD show bearish region as well.

Today is a good day, end my day with 200USD profit. I grade it a grade 5 trade, because it is within my 2 weeks target, with profit percentage > 50%.

The recent market sentiment is bad, with subprime issue is still hanging around, I do not foresee a bullish market coming back too soon. As you see Dow Jones having its 11800 overhead resistance, the chart seems like forming a potential head and shoulder pattern, it crosses 22ma level to become bearish.

Though oil price is getting lower now, but the market see it as a bad sign as oil demand drop. Which means that the economic slowdown might become another fear.

Now QQQQ having its support on 44 level, if QQQQ plunge through 44 level, it could be another potential disaster.

My 2 cents of thought, happy trading ....:)

To learn more, you can find out more free resources from Options Trading Academy. Always trade with your passion! Cheers!

Paul's Trading Journal 3 Sep 2008

Start internet marketing business with a blog

If you would like to start your internet marketing business, without having a domain with web hosting service, you might need to start with a free and simple way - blog.

With the appearance of Web2.0 or Weblog, in short Blog, every one can have his own webpage, without paying for the web hosting service. The only difference is you still do not have the full ownership like owning a domain. Nevertheless, blog still enable user to write, upload picture and video.

To start, you may need to consider which type of blog service you like. I would like to only introduce 3 here - blogger, wordpress and typepad.

Blogger is one of the most common and easiest blog service to start off with, it is owned by Google, once you sign in your Google account, you will automatically sign in to your blogger account as well. It is simple to use, with all plug and play method, you can master the art of blogging within few hours.

Wordpress is a more advance version blog service, just like blogger, you can easily choose any template you like. The concept is just like blogger, add your widgets with plug and play method. Nevertheless, Wordpress enable you to upgrade to better feature, like custom CSS, more storage space, unlimited private user and etc with small amount of cost. You can have your blog parking at your domain address from Wordpress as well.

Last to mention - Type Pad, though it is not free service like the above two, it comes with great services and unique feature. Typepad has its own SEO – search engine optimized technique that make your blog easily found by searcher, you can measure your blog traffic without using a third party counter, and typepad is partnered with Amazon, eBay and Pay pal to make you earn money faster through blogging.

That’s all, make your choice and start making money through blogging! Always blog with your passion!

To find out more, please visit Internet Marketer Journal

Start internet marketing business with a blog