July 28: Stock Market Trading Rules – Perfecting The First-Class Exit – Part 11

Welcome back to the 11th part of the Ultimate Trading Systems article series. In this lesson, we`re going to discuss: Stock Market Trading Rules – Perfecting The First-Class Exit.

IMPORTANT BEFORE WE START:

For a more detailed explanation of the stock market trading rules we will be discussing in this article, be sure to work through your copy of Trading Secrets Revealed. This article, rather than repeating Trading Secrets Revealed content, is designed to be a quick refresher.

http://www.trading-secrets-revealed.com

Buying the correct stock and the correct number of stocks is all to no avail if you do not know how to create your stock market trading rules. One rule that we are referring to is when to exit a position. In fact, having stock market trading rules that define your exit is as important as defining your entry. This is simply common sense. However, most traders do not devote any thought to these stock market trading rules. This is an important aspect of a trading system.

Before you enter a trade, you should have a set of stock market trading rules that tell you where your exits are. There are at least two stock market trading rules for every trade. First, what is your stop loss if the trade goes against you? Secondly, what is your trailing stop if the trade moves in your favour? Remember these stock market trading rules must be written down. Mental stock market trading rules don`t count.

Sadly, most novice traders are doomed to break the age old rules of trading by “letting your profits run and cutting your losses short.” They do this simply by failing to define their stock market trading rules when dealing with exit rules. The truth is that, psychologically, humans are hard wired into believing that they must be right.

Here`s what I mean, when the undisciplined trader uses no stock market trading rules and enters into a trade they expect to profit from this trade. If, however, the stock price goes against them, they further feel they are “right” and justify why they bought the stock by holding onto it until it turns a profit. Unfortunately, and most likely, their losses are compounded as time passes.

Similarly, to the case of a loss, if the position moves in their favor, the undisciplined trader uses no stock market trading rules and sells the position at first sight of any profit. They have an inherent need to crystallize this winning trade and be “right”. Clearly, this is in direct conflict to the rule of letting your profits run.

Both these situations can be avoided by setting up stock market trading rules and predefined exit points. Think of setting your exit stock market trading rules as an ejector seat when things go wrong and a seatbelt to strap you in when things go right. As with entry stock market trading rules, exit stock market trading rules should be precisely defined and 100% mechanical.

You are now ready to document your exit stock market trading rules. Using both Trading Secrets Revealed and the package containing your entry stock market trading rules, your next task is to get your exit stock market trading rules written down.

YOUR EXIT STOCK MARKET TRADING RULES
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By documenting your exit stock market trading rules you have just put yourself into the top 2% of traders. Congratulations!! You are almost in the top 1%.

Let`s get your exit stock market trading rules right.

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MUST DO ACTION STEPS:

1. Using your copy of Trading Secrets Revealed and your entry stock market trading rules package – write down in plain English – your exit stock market trading rules in reference to your exit.

http://www.trading-secrets-revealed.com

IMPORTANT:

At this point you should have now have fully documented the 3 components of your stock market trading rules that make up your trading system… That said, we have not yet discussed perhaps the most important area of designing any trading system. It is this area that will provide you with the confidence you need to trade your system. Be sure to keep reading these articles to uncover my next stock market trading rules secret that will make your profits soar!
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Youve Read Part 11 of The Ultimate Trading Systems Series –
The Formula For Designing Profitable Trading Systems.
To Download This Entire Series For FREE Click Here.
Click Here ==> http://www.ultimate-trading-systems.com/greatnews.htm
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