Feb 06, 2021
2 mins read
Mark Minervini is a 5 time US investing Champion, a multi-millionaire from trading and he trains future traders. Many of his students have gone on to great heights and performed well, many featured in top 10 in US investing championship.
Here are his time tested 10 Trading Rules for successful trading.
Concentrate - Don’t diversify
keeps things manageable
Keeps you focused
Allows you to be patient - the luxury of integrity
Focus on the very best names
Turn over your portfolio
Forget about taxes
Forget about getting the high
Forget about your ego
Nail down decent profits when you have them
Time your trades
Time is money
Learn how to identify a VCP (Volatility Contraction Pattern) setup
Develop “sit-out power” - only trade proper set-ups and allow them to come to you
Manage the risk reward relationship
Do the math
Don’t risk more than you expect to gain
Monitor your gains regularly
Rule of thumb: Cut your losses at 1/2 your gains
Build in “failure” (a system / edge based on win-loss rate depending on the strategy. Risk-reward should be based on this. Risk not higher than reward is win rate is low)
Approach each trade “risk first”
Know where you’re getting out BEFORE you get in
Write it down
CUT YOUR LOSSES QUICKLY - don’t vacillate.
Failure to adhere to stops is the single most destructive mistake made by all investors.
NO BIG LOSSES
NO FORCED TRADES
Only buy in the direction of your trade
Never average down
Multiple timeframe alignment
Determine if the “train” is on schedule
Build on Success
Trading is not an on/off business
Let small wins finance larger risk
Trade largest when trading your best and smallest when trading your worst
If you’re not profitable at 25% or 50% invested, don’t go to 75% or 100% invested.
Protect your breakeven point ASAP
2-3x risk above average gain
Never let a good size gain turn into a loss
Backstop you’re profit
50-day Rule (for stop loss once 50MA moves above breakeven price)
Sell into strength
get out before the stock can break
It’s better to sell early than late
Selling half is a win/win solution
Conduct post analysis regularly
Results don’t lie
Look for commonalities (behavioural patterns)
Improve your weaknesses
Know the truth about your trading
Avoid Style drift
define your trading style (day trade, Swing or long term investor, partial profit/adjust stop loss)
Be willing to sacrifice
Become a specialist
You will see how our recent training event on one of the most simplistic trading strategy - “CT50 - Simple 3 Step trading strategy” - has incorporated these time tested rules of trading within its framework to give you the edge for gradual accumulation of wealth and a secure way to GrowWealth over time.
Trading and stock market investing is an “art” that anyone can learn with the right guidance and effort.
Here at GrowWealth, you get the guidance. With your efforts to learn and practice the discipline, you are then destined for greatness.
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Happy Learning and Successful Investing 🙏