Trading rules by Tim Knight

I have came across Tim Knight’s Trading Rules blog and loved it so I have quotes it today’s blog.

Stops – a stop price must be in place at all times for all positions.

Exits – the only acceptable exit is either being stopped out of a position or reaching a target price which has a clear technical rationale, and even in cases of the latter, partial exits are preferable to outright closes.

Trend – the trend of the market is defined by the 13-week EWA and 52-week EWA of the $SPX. Based on the relative position of the 13-week EWA, the market is either Up-Trending (13-week EWA above the 52-week) or Down-Trending, and no more than 20% of the value of all your positions may be positioned against that trend at any one time.

Freshness – positions should be regularly updated for the sake of updated stops.

Opening Bell – no new positions should be initiated in the first 30 minutes of any trading session. There are an astonishing number of pre-opening orders, and in my experience, I have found it better to let all the open bell excitement die away before getting into any new positions.

Emotional Awareness – use emotional awareness to your advantage, understanding fear often accompanies reversals in your favor and hubris often accompanies reversals against your positions. My state of mind, when trading, will be carefree and fearless, and my total focus will be technical considerations and I will only trade what I see.

Sizing – position sizing must be consistent among instrument types irrespective of anticipated opportunity.

The answer is simple . You must be active and closely monitor your stocks.

Time Knightis a active commentor in Cara Community Com. He is an software developer and active trader with professional insights and knowledge in stock trading.