The "Not So Simple" Rules of Trading

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Old Jul 17, 2006, 2:34pm   #1
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The "Not So Simple" Rules of Trading

We've just published a new T2W article called "The "Not So Simple" Rules of Trading" by John Mauldin.

Quick Summary: What rules should you trade by if you want to be successful? The author looks at rules that seem simple, but are difficult to stay with.

PS. Don't forget to rate the article after you've read it and share your comments on this thread.
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Old Jul 17, 2006, 3:02pm   #2
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As ever from John Mauldin, a quality article.
His "Thoughts from the Frontline" newsletter (free subscription at his website) often contains good insights.
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Old Jul 17, 2006, 4:31pm   #3
 
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I agree that the rules are not so simple, particularly rule #5, which has to do more with goals and objectives than with market mechanics or money management. Buying "high" often means buying a top. And much depends on how one defines "high". And what he's trading. Or whether he's trading or investing. For instance, if one were trading indexes, he might still be waiting to buy high (again, depending on how one defines "high").

This particular rule, therefore, is best applied within the context another of his rules, that of fundamentals (not only of the economy and market, but of the sector and group), particularly if one is interested in more than speculative issues.
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Old Jul 17, 2006, 9:41pm   #4
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Quote:
Originally Posted by twalker
As ever from John Mauldin, a quality article.
His "Thoughts from the Frontline" newsletter (free subscription at his website) often contains good insights.
Absolutely.

He's up there in the top tier of regular commentators, as are most of the "linked" colleagues he occasionally refers readers to.
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Old Jul 17, 2006, 9:58pm   #5
 
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Rules of war

As Db said, some are not so simple. They seem simple logically, but are more difficult to apply in practice.

The rule that particularly struck me was 3 - Learn to trade like a mercenary guerilla. To me this means understanding the battle - between supply and demand, weak and strong holders, being on the correct side of the market. It means understanding the tactics of the "opponent", but also utilising the lie of the land (the trend) to your advantage. It also means, as the article stated, switching sides as soon as it is evident that it would be advantageous to do so.

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Old Jul 31, 2006, 9:00pm   #6
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This is simply brilliant. Must try to actually do this - trade by these rules. So well written, I'll look for his website.
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Old Nov 21, 2006, 2:38am   #7
 
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easier said than done
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Old Nov 21, 2006, 9:40am   #8
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I've just read the article.

Excellent rules - I especially like 1 and 2.


Thanks

Damian
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Old Aug 19, 2008, 9:57pm   #9
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i hit "print" and stuck it on my wall. top stuff
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Old Jun 14, 2009, 4:55pm   #10
 
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While these "rules" may sum up all that is probably nothing more than common-sense for regular successful traders, they - in reality - offer nothing for traders who are looking for less abstract concepts in trading guidelines.

I find this to be little more than the re-cycled, regurgitated hype espoused in most, if not all newsletters and trading publications. Traders love to shuffle paper - this is such shuffling.

Did any reader actually change anything they were doing after reading this article? Or did it simply add to the warm and fuzzy feeling that they are "on the right track" and that success must therefore, be around the next corner.

I would think that a decent set of rules would be as follows:

1) Find a market you relate to, and master that market.
2) Take the time to discover its quirks, and idiosyncracies
3) Exploit the arbitrage that occasionally presents
4) Understand your edge, and exploit that to the fullest extent, once proven
5) Trade only when the probability of success is established
6) Understand the use and abuse of leverage, and obey it unwaveringly

Trading more than one market without mastering either, is tantamount to "hope', and "hope" will fail us in trading. Leverage is the secret to success, but it is also the hidden net to ensnare the uneducated.

A nice general article, but no teeth.

Rating: 4/10
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Old Nov 4, 2010, 12:30pm   #11
 
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Re: The "Not So Simple" Rules of Trading

Exelent stuff mate ,nothing like a little shared wisdom, you can take from it what you need and apply it as you need
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Old Dec 27, 2010, 9:46am   #12
 
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Re: The "Not So Simple" Rules of Trading

Great basic rules for beginner traders.
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Old Aug 1, 2011, 10:24am   #13
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Alan

Sound common sense!
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Old Aug 1, 2011, 11:08am   #14
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Good common sence

Some great commmon sence here and thats what trading is....

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Old Aug 1, 2011, 4:19pm   #15
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Re: The "Not So Simple" Rules of Trading

If you follow these rules will you become a successful trader?

NO!!

Which means these rules are not the "rules"

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