PURE LOGIC AXIOMS
Pure Logic Trading
Know thyself...trading is a reflection of what you believe about
yourself; it is the ultimate mirror of yourself. Your virtues and vices
will be exposed. You must master your ego and beliefs to be successful
NEVER EVER TAKE A BIG HIT
Large losses are the number one account killer. Never let a trade get
away from you. I always say "LOSE YOUR OPINION, NOT YOUR MONEY"
Is doing the same thing over and over again and expecting different
results. Take the road less traveled. The "herd" is almost always on the
wrong side of the trade.
TRADING IS 90% MENTAL
The other 10% is in your head. We always get what we focus on. Trade in
the PRESENT moment and focus on correct action.
THE MARKET OFTEN MOVES IN THE DIRECTION THAT WILL INFLICT THE MOST PAIN
ON THE GREATEST NUMBER OF TRADERS
Yes, the professionals are out to take your money. Often the harder
trades to take are the ones that reward you the most. Think outside the
TRADE FROM A BLANK MIND; UNBIASED, UNEMOTIONAL, AND UNIMPULSIVE
Itís worth repeating "Lose Your Opinion, not your money."
EXPECT THE UNEXPECTED
To be a great trader you have think outside your comfort zone. Have a
plan to take advantage of market jolts (the trade action that normally
takes your money from you).
EXPECT AND ACCEPT LOSING TRADES
Losing trades are natural phenomena to the business of trading. Good
traders acknowledge this and ensure that they exercise careful money
management to mitigate the risk of loss.
WHEN IN DOUBT GET OUT
Sometimes market action and news etc. get traders confused about their
original intent and purpose in a trade. Then they tend to "hope" the trade
will work or come back. This leads to paralysis and trades getting away
DON'T SHOULD ON YOURSELF
Stay away from the market victim mentality at all costs. Wish I would
have should have etc. is defeating language to yourself. Traders need to
stay in a positive mindset.
DO NOT OVERTRADE
Novice traders feel a need to have a trade(s) on and often are jumping
in and out of the market randomly. Overtrading will kill your account and
HAVE A BUSINESS PLAN FOR EVERY TRADE
Know your entry, stop-loss, and target price for every trade. Write
your plan down and stick to it.
THERE ARE NO ACCIDENTS IN TRADING
The market is always right. If you are not getting the results you
want, you must change your beliefs about trading and yourself. What you
fear you create!
DO NOT TRADE THE MONEY
Focus on correct action in the present moment and not on your P/L. When
traders focus on the money they become emotional and usually make poor
KEEP A TRADE JOURNAL
There is no better teacher than your own experience with your winners
and losers. Review your journal daily, weekly, and monthly. It is very
important to stand accountable for all your results.
THE OLD AXIOMS AND THE TRUTH ABOUT THEM
THE TREND IS YOUR FRIEND
Canít argue with this; trading on the side of a defined trend has the
most consistent history and rewards.
CUT YOUR LOSSES SHORT AND LET YOUR PROFITS RUN
Sounds great (and it is) however is much more difficult to do in the
real world of trading. This is exactly why each trade set up begins with a
well-defined plan for all possibilities.
NEVER BUY A FALLING ROCK
Or step in front of a freight train. This axiom warns against trying to
pinpoint tops and bottoms and fading strong moves.
NEVER AVERAGE DOWN
This policy is good for beginning to intermediate traders. However, the
pros do love to average into a position over time at specific levels.