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8 Tried and True Commodity Stock Trading Application Rules That Will Explode Your

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Some commodity Stock Trading Application rules are made to be broken, but 
when you're trading, there are some rules are meant to be followed. Here some of 
the Stock Trading Application rules that I consider the most important 
principles of trading. I suggest that you make a copy of them and place them in 
your trading diary or tape them to your desk, so that you'll always remember to 
follow them.
Commodity Stock Trading Application No. 1 ~  Cut Your 
Losses
Never let your losses get out of hand. It is one of the most important things 
that you can do to ensure you are successful. Losses can devastate you 
emotionally and will diminish your trading capital, violating your primary aim 
in trading – to preserve your capital. If you could get successful traders to 
credit their success to one thing, many would select this rule. 
Commodity Stock Trading Application No. 2 ~  Let Your Profits 
Run
Hand in hand with the first rule is the second ~  let your profits run. 
Your trading plan will probably produce profitable trades less than half of the 
time. Therefore, you need to make sure that when you do achieve a profit, you 
get the most out of the move in the stock. Some up trends take time to develop; 
and you must wait until you see the high in the stock achieved and then the 
reverse in direction before you consider closing the position. Until you see the 
reverse, you won't know if the stock is going to go any higher. Remember, your 
few profits must outweigh many losses. 
Commodity Stock Trading Application No. 3 ~  Follow the 
Trend
In trading, trends are the only friends you have. Always trade with the 
trend! Never attempt to identify the bottom in the stock or time your entry 
using that approach. If you do, you can be run over as the stock continues on 
its way down. There is often great force and momentum at work when a stock is 
trending in either direction, particularly when the trend is down. Don't try to 
fight it. Why buy something that is heading in the wrong direction on the hope 
that it will turn around and head back up past your entry level? 
Commodity Stock Trading Application No. 4 ~  Don't 
Overtrade
Don't trade for the sake of trading. Never force the action. If you are not 
comfortable with any of your potential trades then don't open a position. It is 
a mature decision to do this when conditions aren't quite right, and you won't 
be trading for the wrong reasons. 
Commodity Stock Trading Application No. 5 ~  Never Act on a 
Tip
Who hasn't reacted to a tip they heard from somebody about a stock that is 
apparently going to the moon and never coming back? Never act on a tip; tips are 
rarely good. The worst part of tips is that you will probably stick with the 
trade even when the security starts to head against you. You will be more 
inclined to break the commodity Stock Trading Application rules and not cut your 
loss because of the 'reliable' information you have heard about the stock's 
future. Instead of trading on tips, have confidence in your own plan. 
Commodity Stock Trading Application No. 6 ~  Always Trade Liquid 
Stocks 
It is a horrible feeling of helplessness to be stuck with a stock that you 
need to exit from because there aren't enough buyers in the market. Liquidity is 
the ability to trade in a security without adversely affecting its market price. 
Always demand liquidity in your securities before you consider trading them, and 
you'll never be stuck with a stock. 
Commodity Stock Trading Application No. 7 ~  Keep Positions 
Small
When trading, you need to understand and manage risk to achieve long term 
success. If you want to completely avoid risk, then don't commit any money to 
any financial market. If you are prepared to take some risk, then managing and 
controlling that risk will be crucial. One of the best ways to do this is to 
ensure you have, and use, a good position sizing model. This model will ensure 
that you don't commit too much of your trading capital to a single position, 
allowing you to spread your risk across several positions. 
Commodity Stock Trading Application No. 8 ~  Don't Buy Something 
Because it Looks Cheap
If a stock is cheap, there is probably a very good reason for it. Only 
consider stocks that are trending up. There is no such thing as a stock that 
might start to trend up any day. Even if a stock looks cheap, who is to say that 
it will not get cheaper? It may never increase in price again. 
With these commodity Stock Trading Application rules, a solid trading system, 
and good money management, you can become a successful trader. Remember these 
commodity Stock Trading Application rules and use them. Particularly when you 
don't want too.

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