Super Gann Trader Academy, which conducts stock market courses in Delhi, offers free trader awareness lessons.

b10.1Before understanding requirements for trading rules, let us discuss and understand the need for driving rules. Driving is something that we all do almost every day in our life.

When we drive, we follow these major rules of driving:

  • Drive on one side of the road (left side in India).
  • Follow traffic signals at road junctions.
  • Follow speed limit.
  • Follow overtaking and turning rules.
  • Wearing helmet for riders of two wheelers and seat belts for four wheelers.

These driving rules make driving safer for everyone. Traffic authorities enforce these rules and fine those who violate them to keep us safe while driving.

We, as humans, are social animals. Our life is governed by the rules of society from childhood. Whether we like it or not, rules of safe behavior are present everywhere, from family and school to  the work place in society. These rules are made to protect us – sometimes, even from ourselves.

Trading activity is however an exception. In trading, there is no restriction on what an individual can do as long as he has the money to fund his account. There is no protection offered by society if traders take risks beyond their financial capacity. He may place his savings, his house, and his future at risk and no one will stop him. In trading, there are trades in which risk of loss is limitless. Potentially, people can do tremendous damage to their financial health.  The market, brokers or other regulators do not provide any protection to any individual from committing financial suicide.

To prevent financial ruin, we need to have internal controls and disciplines. Hence, this is one job where we require maximum mental discipline to control our actions in the market. Rules that help us to control and manage financial risks are required to be part of trading behavior. However, markets regulators, brokers or TV analysts do not provide such rules. We need to make and follow rules for our own good. We need to check if these rules are effective by testing.

quotesBut there is a paradox; traders do not like to follow rules. The main reason is that they get in to trading because it offers freedom. There is no boss and they can do what they feel as right. They keep failing because of lack of correct guidance.  Market regulators, brokers and TV gurus do not provide the guidance required to be successful in trading.

Trading is like any other profession. We have to learn the business and trading skills associated in order to succeed. The trading skills take time to develop.  Trading can be mastered with correct guidance. One needs to have wisdom and patience to learn before we can earn.

Trading systems are sets of rules that guide our trading decisions. These systems are designed to keep market risks manageable and prevent financial suicide.

We conduct training classes to teach trading as per trading system. Join our training program to become a top trader.

Here the List of Blogs in this Series 

  1. What is Money Management?
  2. Following a trading system can make you rich more?

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