Top Trading Rules

success in trading

Welcome to my website where you can learn the most important rules that you need to learn to become a successful trader. Learn what to do and what you should never do.

The 10 most important rules to learn are:

Never use a dangerously large leverage

leverageLeverage is a useful tool that can be very dangerous if it used to aggressively. Leveraged trades allow you to earn more money in a shorter amount of time. The flip side of this is that you also can lose money a lot faster. Some FOREX and CFD brokers allow you to trade with a 1:200 leverage (sometimes more) this means that you will win or lose 200 the change in the traded instrument. If the instrument goes up 1% in value you will earn a 200% return on your investment.

It is possible to lose more money then you invested when you use leveraged products. If you do not know what you are doing you can end up in deep debt from one unfortunate trade. Read more here.

Never trade with financial instruments you do not understand

There are a number of heavily promoted financial instruments such as binary options that can be very dangerous to trade with if you do not understand how they work.  If you do understand them then they become powerful tools that can help you earn a lot of money quickly.

It is very important that you study any financial instrument before you start trading in it. If you do not understand a financial instrument then there is a big risk that you will lose money while trading in it. The more you know about binary options and other exotic financial instruments the more money you can earn while trading with them.  Read more about binary options by visiting

Always use a trading plan when trading in securities

You should always have a plan when you are trading with securities. Know your goals and what type of portfolio you want to build. If you do not have a formulated plan you risk ending up with an unbalanced portfolio driven by whims. Read more here.

Always use a stop-loss or similar protection

A stop loss is a great way to avoid losing money in the event of a stock market crash or other market crash. The stop loss will automatically sell your stocks when their value sinks below a certain point. This way you avoid owning your stock during the crop in the market and can use your liquidity to buy more stocks later when they have hit the bottom. A stop loss is a very valuable tool that can make a stock market crash something very profitable. Read more about different types of stop loss orders.

Never be pushed into making a trade

You should never allow yourself to be pushed into a trade by someone else. Trust you own judgment and to not invest in projects you do not think are going to work out. This is true regardless of whether the person trying to push you into the trade is an experienced trader or not. It is especially important to never get pushed into a trade by a financial adviser. They might not have your best in mind when they are trying to get you to invest. Read more here.

Never invest without taking time horizon into account

Your investment horizon will have a large impact on what investments that are suitable for you. If you know that you are going to need the money you invest in a short amount of time you need to avoid all risky investments. If you have a longer time horizon you can accept more risk. Read more here.

diversifyAlways diversify

It is very important to diversify your investments as much as possible. This will help you reduce the risk that you are being exposed to. If you diversify your investment your portfolio can do well even if one of your investments are doing badly. Diversifying your investment does not mean just buying a few different stocks in different industries. It means building an investment portfolio containing many different types of financial instruments as well as real world assets such as real estate. Read more about why you should always diversify.

Never risk more than you can lose

Never invest money if you can not afford to lose them. If you are going to need to money within a few months it is better to not invest them at all. Investing money that you can not afford to lose is a recipe for disaster. Read more here.

Always adjust your investments to your situation in life

Your life situation have a very large effect on what types of investments you should make. If you are young and single you can take more risks than you should do if you have young children or if you are close to retirement. You can read more about how you should invest based on your life situation here.

Never follow advice blindly

never trustYou should never follow any ones advice without first doing some research and forming your own opinion on the suggested investment. How much research you should do depends on how is giving you the advice. If it is a person that you have invested with for a long time you can trust his advice more. If you get advice from a financial adviser you should be a lot more skeptic and do more research. Financial advisers are not required to but your interest ahead of their own and they often get large commission for referring you to different brokers. Financial advisers get large amount of money when they promote binary options, annuities, FOREX and CFD:s. Most advisers give good advice but you should still do some research before you follow their advice. Read more here.

Always use technology to your advantage

Use technology to automate any aspect of your life that isn’t a productive use of your time and you do not like doing. The more menial tasks you can cut from your day. The more time you can spend earning money. Read more here.